The U.S. Department of Labor has announced that it has recovered $11.4 million in back wages and liquidated damages for more than 1,000 employees of Plaza Azteca locations in seven states after a series of investigations and litigation by the department. This includes the locations in Plymouth Meeting and King of Prussia.

Due to the “repeat and willful nature of the violations,” the consent judgment also recovered $625,000 in civil money penalties from the employers.

The recovery is related to a consent judgment entered by the U.S. District Court for the Eastern District of Virginia in Norfolk that resolves litigation by the department’s Office of the Solicitor related to pay practices at more than 40 Plaza Azteca Mexican restaurant locations owned by Ruben Leon. After an investigation by the department’s Wage and Hour Division, the department filed a complaint alleging Leon and the restaurants violated overtime and minimum wage provisions of the Fair Labor Standards Act. 

The employers agreed to the consent judgment after months of litigation and just before a jury trial was scheduled to begin.

“Our investigators found Plaza Azteca knew of its legal obligations to pay workers minimum wage and overtime and keep accurate payroll records and yet, willfully disregarded federal law,” said Wage and Hour Administrator Jessica Looman. “The employers failed to pay full wages to more than 1,000 employees. The court’s action in this case is an important step in our efforts to make a meaningful difference in the lives of these workers by recovering their hard-earned wages.”

The U.S. Labor Department alleged that Plaza Azteca Mexican restaurants owned by Leon paid back-of-the-house employees predetermined amounts, which resulted in some employees making less than the minimal wage for a 40-hour workweek. The restaurants also did not pay some employees time-and-a-half for hours over 40 in a workweek. The employers also failed to maintain accurate records of employees’ work hours and wages, as required. 

“This outcome sends a strong message to other restaurant industry employers of the costly consequences that can occur when they deprive employees of their full and rightful wages,​” said Solicitor of Labor Seema Nanda. “As we did in this case, the U.S. Department of Labor will strategically deploy our investigative and litigation resources to remedy systemic violations of the law at a national scale across an enterprise’s locations.”

In addition to the back wages and penalties, the consent judgment forbids the employers from violating the FLSA in the future and requires them to retain a qualified independent consultant to make certain the employers’ payroll and recordkeeping practices comply with the FLSA.

The back wages and liquidated damages are due to certain current and former employees of Plaza Azteca restaurants regardless of their immigration status. As some of the workers affected by this case may have relocated, the Wage and Hour Division encourages former or current affected employees to contact the division at 215-861-5180 with any questions. 

The Wage and Hour Division district offices in Boston, Pittsburgh and Wilkes-Barre, Pennsylvania, and Richmond, Virginia, conducted the investigations. The Boston and Philadelphia Regional Solicitor’s offices litigated the case.

This is the second local restaurant that has had to pay this type of judgement. In September, a pizzeria in East Norriton had to pay $252,579 in back wages and liquidated damages to 21 employees.