Rochester Restaurant Owners Settle US Labor Case For $436,000
Minneapolis (KROC AM News) - The owners of a Rochester restaurant have been ordered to pay more than $400,000 to workers at two of their other businesses for treating them as independent contractors and not as employees.
The US Department of Labor Tuesday announced a consent judgment was entered in federal court involving the owners of Rancho Loco Grill and Bar in Red Wing and Rancho Loco Mexican Grill and Bar in Cannon Falls.
According to a press release, Ramon Ruelas, Jorge Arcos, Nancy Arcos and Medardo Arcos were ordered to pay a total of $435,785 in unpaid overtime and minimum wages as well as interest, and agreed to comply with the Fair Labor Standards Act in the future.
According to the release, the case involved a total of 36 employees at the two businesses. Investigators learned the restaurants paid the servers and other workers for 60 hours biweekly, regardless of the number of hours they actually worked. Servers were also required to report early for prep work but only allowed them to “punch in” when the first customer arrived.
The release says “By misclassifying cooks and dishwashers as independent contractors instead of employees, and paying them a flat rate without regard to the number of hours they worked, Ruelas and the Arcoses denied workers legally required overtime when they worked more than 40 hours in a workweek. The restaurants also failed to maintain accurate records of employee wages and the number of hours employees worked.”
“Our investigation found this employer broke the law deliberately. Employers who misclassify employees as independent contractors cheat those workers out of wages and deny them other workplace protections,” said Wage and Hour Division Assistant District Director Kristin Tout in Minneapolis. “Restaurant employees are among the nation’s lowest paid essential workers and they are often unaware of their rights to minimum wage and overtime. The U.S. Department of Labor is committed to using every enforcement tool available, including litigation, to ensure they are paid every penny they have legally earned for their hard work.”
The owners also operate the Los Arcos Kitchen and Cantina business near the Rochester airport.
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