The La Hacienda restaurant chain systematically stole more than $500,000 in wages from 119 employees between 2011 and 2014, a U.S. District Court judge ruled Monday.
Under Judge C. Weston Houck’s judgment, each of the affected employees will receive his or her wages owed plus damages, which in one instance exceeds $60,000. The total mandated payout is $1,179,045.
In addition to agreeing to comply with the financial provisions of the judgment, the defendants formally acknowledged they will face contempt charges if they violate labor laws in the future.
An investigation by the U.S. Department of Labor’s Wage and Hour Division revealed multiple violations of the Fair Labor Standards Act at all 10 of La Hacienda’s South Carolina locations, as well as at Los Jalapenos Mexican Grill in Hilton Head, Poblanos Mexican Cuisine in North Charleston and Margaritas Mexican Restaurant in Summerville.
“Our investigation of these 13 Charleston-area restaurants found many low-wage employees working long hours without any overtime compensation and, at times, earning wages far below the federal minimum wage,” said Jamie Benefiel, director of the division’s Columbia office. “Labor violations like these are unfortunately all too common in the restaurant industry.”
While the total dollar amount assessed appears large, a Labor Department spokesman says the average amount per location is not uncommon in the restaurant industry.
Albert Bolet, attorney for owners Antonio Ayala and Jaime Tinoco, declined to comment.
Ayala’s father, Jesus Ayala, in 1991 opened the first La Hacienda in Greenwood. The company had grown to 10 Lowcountry locations by 1998, when two of its managers were charged with crimes related to the employment of about 100 people accused of entering the country illegally. The government claimed La Hacienda illegally paid some of those employees in cash or forced them to work exclusively for tips.
In the current case, La Hacienda required servers to give a portion of their tips to management, and didn’t pay three servers who received tips.
According to federal law, tips belong to the employee who collected them, although employers can benefit by counting those tips toward their obligation to pay the full minimum wage. In South Carolina, the tipped minimum wage is $2.13 an hour. But if the employer initiates an illegal tip-sharing scheme, or otherwise violates the law’s provisions, the employee is owed $7.25 an hour. The La Hacienda back wages for employees who worked for tips only were calculated on that basis.
Awards range from $54.66 to $61,089.06, depending on number of hours worked and prior payments. Each affected employee is entitled to receive damages equal to the amount of back wages.
According to a Labor Department spokesman, workers are entitled to wages they earned regardless of their citizenship status. Approximately 60 percent of the employees recovering unpaid wages and damages still work for La Hacienda.
Other violations discovered by investigators included failing to keep records of employees’ hours; not paying cooks, dishwashers and runners for all of the hours they worked; and making employees buy their own uniforms.
La Hacienda’s two Georgia locations were not covered by the investigation.