The U.S. Department of Labor has sued an Iowa-based chain of Mexican restaurants, alleging the owner broke federal wage laws by failing to pay minimum wage and overtime.
Videos by Wide Open Country
The lawsuit, filed in the U.S. District Court for the Southern District of Iowa, targets Mexico Lindo Grill & Cantina and its owner, Rocio Correa-Mata, 33, of Iowa City. The Labor Department claims Correa-Mata violated the Fair Labor Standards Act of 1938.
Investigators say the restaurant chain paid some servers only in customer tips, without any hourly wage. That pay structure violates federal law, which requires a minimum of $7.25 per hour.
Servers Allegedly Receive Only Tips
Mexico Lindo operates locations in Iowa City, North Liberty, and West Branch, Iowa. The lawsuit says servers at each site received no base wage and relied solely on tips.
Officials also say the company failed to pay overtime to employees who worked more than 40 hours a week. Federal law requires employers to pay time-and-a-half for those extra hours.
The complaint says kitchen workers -- often referred to as back-of-the-house staff -- received flat cash salaries. Those salaries did not account for overtime hours, investigators say.
The Labor Department also accuses the company of poor recordkeeping. Officials say management failed to log accurate hours, employee names, and Social Security numbers.
Owner Accused of Hands-On Violations
According to the lawsuit, Correa-Mata actively managed all three restaurant locations since June 2015. She allegedly set pay rates, scheduled shifts, and hired or fired staff.
The Labor Department wants a court order to stop further violations. It also seeks back pay for 25 employees, along with an equal amount in liquidated damages, essentially doubling the owed wages.
As of Thursday, the department had not reached Correa-Mata for comment at her home or any restaurant location.
The Fair Labor Standards Act sets national rules for minimum wage, overtime, and employment records. Employers who break the law can face penalties and court-ordered restitution.
While the investigation remains ongoing and these are only allegations, it's the kind of news that could put a place out of business. One Iowa-based chain may learn that the hard way.
