News Brief
US Department of Labor files lawsuit alleging wage violations at 3 Barrio Tacos locations, seeks $823K in back wages, damages for 177 workers
Employers: Sparty Tacos LLC
TC Tacos LLC
GR Tacos LLC, operating as Barrio Tacos
Owner Jacob Hawley
Actions: Fair Labor Standards Act complaint filing
Courts: U.S. District Court for the Western District of Michigan, Southern Division
Investigation findings: On Sept. 7, 2023, the department filed suit seeking a total of $823,324 – $411,662 in back wages and an equal amount in liquidated damages – for 177 employees of Sparty Tacos in East Lansing, TC Tacos LLC in Traverse City and GR Tacos LLC in Grand Rapids, all of which operate as Barrio Tacos. The complaint follows an investigation by the department’s Wage and Hour Division involving alleged FLSA violations by the three restaurants and their owner Jacob Hawley.
Specifically, investigators found the employer:
- Required tipped workers to surrender a portion of their cash and credit card tips to managers after each shift. Managers then redistributed these tips to non-tipped employees, including kitchen staff.
- Failed to pay tipped employees the federal minimum wage of $7.25 per hour.
- Incorrectly paid tipped employees overtime based on the tip credit rate instead of the applicable minimum wage rate.
- Failed to keep accurate records of employees’ hourly rates of pay and overtime premiums due.
The division also assessed Hawley and his three restaurants $23,904 in civil money penalties for the violations.
Quote: “Far too often, our investigators find restaurant industry employers violating the law when they fail to follow applicable wage laws for their employees. There are specific rules for paying tipped employees, for how tips must be distributed, for paying proper overtime and for keeping employment records,” explained Wage and Hour District Director Mary O’Rourke in Grand Rapids, Michigan. “Workers have the right to be paid fairly and fully for the jobs they do and employers must respect these rights.”
Background: 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.
