Federico’s Mexican Food is in the hot seat with the Department of Labor.
An investigation found four Federico’s restaurants in metro Phoenix did not follow the Fair Labor Standards Act by failing to pay hourly employees overtime after they worked 40 hours per week, according to a press release from the Labor Department. Instead of being paid time and a half, the investigation alleges, employees were paid the normal hourly rate even when they exceeded 40 hours of work during a week.
A judge ordered the chain to pay $101,175 in overtime back wages plus damages to 48 different employees, equaling more than $200,000 total. Some employees, the release said, worked an average of 48 hours per week at $8 per hour.
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“Wage violations, especially with overtime, are far too common in the restaurant industry,” said Eric Murray, district director for Phoenix’s Wage and Hour division, in a press release.
The court’s order also dictates Federico’s improve its time-keeping system, so employee overtime is recorded better.
There are 21 Federico's locations in Arizona and three in New Mexico, according to the Labor Department press release.
Federico’s has not returned New Times' request for comment.