The U.S. Department of Labor has secured a significant legal victory against La Tolteca Wilkes-Barre Inc., operating as La Tolteca Authentic Mexican Restaurant, and its owner Carlos De Leon, compelling them to pay $1.3 million in back wages, withheld tips, and liquidated damages to 51 employees. This judgment comes after a thorough investigation by the Wage and Hour Division, highlighting serious violations of federal wage regulations at the popular Mexican restaurant.
The consent judgment, entered in the U.S. District Court for the Middle District of Pennsylvania, concludes a detailed investigation and subsequent litigation by the Department of Labor’s Office of the Solicitor. The findings revealed that La Tolteca Mexican Restaurant had breached the Fair Labor Standards Act (FLSA) in multiple ways, primarily concerning the handling of employee tips and overtime pay.
Investigators discovered that La Tolteca illegally required servers and bartenders to contribute a portion of their hard-earned tips to the restaurant based on their total sales at the end of each shift. This practice violated federal law, as these tips were not being used for a legally recognized tip pool. Furthermore, the restaurant failed to maintain proper records of tip usage, making it impossible to verify if a valid tip pool was in place. In addition to tip violations, La Tolteca also failed to pay legally required overtime wages to three non-exempt salaried cooks who worked over 40 hours per week. The court substantiated these findings when it granted the Department of Labor’s motion for summary judgment prior to the consent judgment.
Wage and Hour Administrator Jessica Looman emphasized the importance of this case, stating, “Customer tips for good service belong to the workers who earned them, not their employers. Misusing any part of these tips is a violation of workers’ rights. This issue is widespread in the restaurant industry, and the U.S. Department of Labor is dedicated to ensuring that every worker receives their rightful wages and that law-abiding businesses are not unfairly disadvantaged.”
As a result of the judgment, La Tolteca Mexican Restaurant and Carlos De Leon are legally obligated to pay $651,778 in back wages and restored tips to affected employees. They must also pay an equal amount in liquidated damages, doubling the financial penalty. Adding to the financial repercussions, the employers face a $26,443 civil money penalty due to the willful nature of the wage violations. Crucially, the consent judgment permanently prohibits La Tolteca and De Leon from any future violations of the FLSA, ensuring future compliance.
Solicitor of Labor Seema Nanda commented on the broader implications for the restaurant industry: “This investigation and litigation clearly demonstrate to restaurant employers that illegally interfering with workers’ wages and tips is against the law and carries significant financial consequences. The U.S. Department of Labor is committed to utilizing all available resources, including legal action, to prevent employers from depriving workers of their rightfully earned wages.”
The Wage and Hour Division’s Wilkes-Barre District Office spearheaded the investigation, with litigation handled by the regional Office of the Solicitor in Philadelphia. The Department of Labor is actively distributing the recovered funds to the workers affected by La Tolteca’s illegal practices. Current and former employees who believe they may be owed wages are encouraged to utilize the Wage and Hour Division’s online search tool, Workers Owed Wages, to check for unclaimed back wages. For any questions or concerns, individuals can also contact the Wilkes-Barre District Office directly at (570) 826-6316.
The FLSA establishes fundamental labor standards requiring employers to pay most U.S. employees at least the federal minimum wage for all hours worked, and overtime pay at a rate of not less than time and one-half their regular rate of pay for any hours exceeding 40 in a workweek. These regulations are in place to protect workers and ensure fair compensation for their labor.
For more detailed information about the Wage and Hour Division and workers’ rights, please visit http://www.dol.gov/agencies/whd. Resources available include a restaurant compliance assistance toolkit to help employers understand and comply with labor laws, and the Workers Owed Wages search tool for workers to check for back wages.
Employers and employees seeking confidential guidance on wage and hour issues can contact the Wage and Hour Division’s toll-free helpline at 866-4US-WAGE (487-9243). The division provides assistance in over 200 languages, ensuring accessibility for all. Additionally, the Department of Labor offers a free Timesheet App for Android and iOS devices, available in both English and Spanish, to help employees accurately track their work hours and pay.
