Restaurant Chain Ordered to Pay Workers $45,700 for Overtime During Pandemic

A New Mexico restaurant chain has been ordered to give employees $45,700 in back wages for overtime accrued at the height of the COVID-19 pandemic.

The decision comes after investigators from the U.S. Department of Labor's Wage and Hour Division discovered that Chachi's—operator of Chachi's Express, Chachi's in Dona Ana and Chachi's Mexican restaurant in Las Cruces—did not pay staff overtime when they had worked more than 40 hours in a week.

Many restaurant workers have seen their wages fall in recent months after businesses were forced to close their doors or limit service to outdoor dining.

In a news release, investigators criticized Chachi's for leaving staff "shortchanged" in this difficult period, even though they had put themselves at risk to keep the business operating.

According to the Fair Labor Standards Act, employees "must receive overtime pay for hours worked over 40 per workweek" at a rate of "not less than one and one-half times the regular rate of pay."

As a result of the investigation, $45,700 in back wages was recovered for 22 workers.

"Failure to pay workers all of their hard-earned overtime is bad business and it cheats employees and competitors," said Evelyn Ortiz, the Wage and Hour Division's district director in Albuquerque.

"As an employer, Chachi's LLC must comply with federal worker protections. Amid the pandemic, restaurant employees—like many other frontline workers—put themselves at risk to earn a living and keep businesses open. The last thing they should have to worry about is being shortchanged by their employer."

Newsweek has contacted Chachi's for comment.

In August, a restaurant in South Carolina was forced to pay more than $75,000 in back wages to 10 workers after illegally forcing them to share their tips with the owner and manager.

An investigation into Sarku Hibachi Grill & Buffet in Surfside Beach found the restaurant required servers—who were paid an hourly wage of $3 or less—to share tips with their employer and manager in a violation of federal labor laws.

Working conditions in the food service industry were highlighted in a six-second video shared to TikTok earlier this month, which shows several restaurant employees crouching behind a counter to grab bites of food.

Although it is unclear which restaurant is depicted in the video, TikTok commenters said it appeared the workers were not given time to eat during their shifts.

America's tipping culture has also come in for scrutiny in recent weeks after a waitress posted a clip on TikTok revealing that she had received a paycheck for just 1 cent.

Chachi's Mexican Restaurant
Chachi's Mexican restaurant in Las Cruces. The chain was found to have not paid staff for overtime hours accrued. Google