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Press Releases

U.S. Department of Labor
Wage and Hour Division
Release Number: 13-1732-CHI

Date: 

Sept. 4, 2013

Contact: 

Scott Allen or Rhonda Burke

Phone: 

(312) 353-6976

US Labor Department sues Señor Pancho’s in Orrville, Ohio, to recover more than $272,000 in back wages for low-wage restaurant workers


ORRVILLE, Ohio -- The U.S. Department of Labor has filed a lawsuit in federal district court against Orrville-based Arriaga Inc., which operates the restaurant Señor Pancho’s, and its restaurant manager Luis Arriaga and officer Martin Arriaga. The lawsuit seeks to recover $272,346 in unpaid wages for 34 employees. An investigation by the Wage and Hour Division disclosed evidence of violations of the Fair Labor Standards Act’s overtime, minimum wage, and record-keeping provisions. The department’s lawsuit also seeks liquidated damages for the employees and asks the court to permanently enjoin the defendants from committing future violations of the FLSA.

“Failing to pay wages and allowing payroll checks to bounce shows little regard for the contributions of these workers and to their basic need of providing for themselves and their families,” said George Victory, the Wage and Hour district director in Columbus. “The filing of this lawsuit demonstrates the department’s commitment to protecting low-wage workers and using all tools available to pursue violators and ensure compliance with the law.”

Investigators found that tipped employees, such as servers, were made to rely primarily on tips for pay. Their wages amounted to less than the federal minimum wage of $7.25 per hour in some workweeks. Several kitchen staff employees were paid on a salary basis and did not receive at least the minimum wage for all hours worked. The employer also failed to pay overtime compensation for hours worked beyond 40 in a workweek, as required by the FLSA. Additionally, many employees who were improperly treated as exempt were either not paid or had their paychecks bounce. The company was also found to have inadequate payroll records and failed to obtain age verification for all employed minors.

The FLSA violations were discovered at the Señor Pancho’s Orrville and Shelby locations. The restaurant’s Shelby location is now under new ownership. The department filed the lawsuit because the defendants have refused to pay the back wages owed to the affected employees.

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour 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. In general, hours worked includes all time an employee must be on duty, or on the employer’s premises or at any other prescribed place of work, from the beginning of the first principal work activity to the end of the last principal activity of the workday. Employers are required to maintain accurate time and payroll records.

The FLSA provides that employers who violate the law are liable to employees for their back wages and, as a general rule, an equal amount in liquidated damages. Back wages and liquidated damages are paid directly to the affected employees.

For more information about the FLSA and other federal wage laws, call the Wage and Hour Division’s toll-free helpline at 866-4US-WAGE (487-9243) or visit http://www.dol.gov/whd.

Perez v. Arriaga Inc. (dba Señor Pancho’s), Martin Arriaga and Luis Arriaga
Case Number:
5:13-cv-01939

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U.S. Department of Labor releases are accessible on the Internet at www.dol.gov. The information in this news release will be made available in alternate format (large print, Braille, audio tape or disc) from the COAST office upon request. Please specify which news release when placing your request at (202) 693-7828 or TTY (202) 693-7755. The Labor Department is committed to providing America’s employers and employees with easy access to understandable information on how to comply with its laws and regulations. For more information, please visit www.dol.gov/compliance.