Indiana restaurant operator ordered to pay $78K in back wages, liquidated damages to 13 employees after coercing workers to return wages in 2021 

HAMMOND, IN – The owner and manager of a Hobart restaurant must pay $78,799 in back wages and liquidated damages to 13 workers after federal investigators found they coerced the employees to return monies they agreed to pay following an investigation by the U.S. Department of Labor’s Wage and Hour Division in 2021.

The division conducted an investigation that found — from at least June 6, 2019 through June 5, 2021 — El Capitan Seafood & Mexican Restaurant did not pay workers proper overtime compensation at time and one half their regular rate of pay for hours over 40 in a workweek. Instead, the employers paid “straight time” for all hours worked and failed to maintain accurate records of employee hours worked and pay received, which are both violations of the Fair Labor Standards Act. 

Following the investigation, El Capitan Seafood & Mexican Restaurant and its owner, Richard Serrano, agreed to pay the workers their back wages and liquidated damages found due, but later coerced workers to return the payments made. The department filed suit seeking a court order requiring the payments and compliance with the FLSA in the future when it learned of the employers’ retaliatory conduct. 

On Dec. 21, 2023, U.S. District Court Judge Phillip P. Simon for the Northern District of Indiana in Hammond issued a consent judgment and order requiring the restaurant, Serrano and the restaurant’s manager, Luis Fernando Jimenez, to pay the monies owed to the workers. The division assessed the restaurant civil money penalties of $7,931 for its willful FLSA violations.

“The federal court’s ruling demands that these 13 employees receive the hard-earned wages and damages that their employer agreed to pay in 2021 and sends a strong message to business owners that the Department of Labor will not tolerate wage theft and attempts to ignore legal agreements and federal wage laws,” said Wage and Hour Division District Director Aaron Loomis in Indianapolis. “Employers have a legal obligation to pay workers all of their earned wages or face potentially costly consequences.”

As part of the judgment, Serrano, Jimenez and the company have agreed to future FLSA compliance. They will also provide employees with information on federal wage laws and with accurate pay stubs that show all hours worked, wages paid, tips earned and withholdings, and install a time clock to record hours worked and breaks taken at all restaurant locations owned, operated and/or controlled by Serrano and Jimenez, including at a similar restaurant owned by Serrano in Houston, Texas.

Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division and how to file an online complaint. For confidential compliance assistance, employees and employers can call the agency’s toll-free helpline at 866-4US-WAGE (487-9243), regardless of where they are from.

Download the agency’s new Timesheet App for iOS and Android devices – also available in Spanish – to ensure hours and pay are accurate.

United States Department of Labor v. El Capitan Seafood & Mexican Restaurant Inc. d/b/a El Capitan Seafood & Mexican Restaurant, Richard Serrano, Luis Fernando Jimenez

Case number 1:23-cv-00178