Suit alleges El Rancho Grande underpaid staff

DAYTON, OH (FOX19) - The U.S. Department of Labor has filed a complaint in U.S. district court in Dayton seeking to recover back wages and damages for workers at three El Rancho Grande restaurants in Ohio.

An investigation determined that the restaurants, as well as co-owners Francisco Magana and Juan Hernandez, violated the Fair Labor Standards Act by failing to pay workers proper minimum wage and overtime compensation.

Investigators have determined that approximately $285,000 in back wages is owed to 171 workers at Gran Fiesta Inc. in Cincinnati, El Rancho Inc. in Sharonville and WRGRM LCC in Dayton.

All three restaurants do business as El Rancho Grande.

"Low-wage workers such as restaurant servers and kitchen staff are far too often taken advantage of because they are reluctant to question employers about their pay and benefits," said George Victory, district director of the division in Columbus. "We are committed to ensuring that all workers receive their rightful wages and benefits."

Investigators found that some kitchen workers were paid a flat rate per week, which amounted to less than the minimum wage per hour, and were not compensated at time and one-half their regular rates for overtime hours worked beyond 40 per week.

Additionally, servers' pay fell below the minimum wage due to deductions made for uniforms and because they were not paid for work performed both before and after their scheduled shifts.

Workers with limited English skills often performed more uncompensated pre- and post-shift work than other servers. The restaurants also failed to maintain accurate time and payroll records as required.

The complaint seeks the restoration of all back wages plus an equal amount in liquidated damages, as well as future compliance with the FLSA's minimum wage, overtime, record-keeping and child labor provisions.

When similar wage violations and the falsification of payroll records were disclosed at the same restaurants by a 2002 Wage and Hour Division investigation, the employer agreed to pay more than $100,000 in back wages.

The FLSA requires that covered employees be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week.