Owners Magana and Hernandez faced a similar allegation following a 2002 labor department investigation and ended up paying $25,218 in back wages to seven employees of what was then El Rancho Grande’s Miller Lane restaurant in Butler Twp., according to labor department officials.
“Low-wage workers such as restaurant servers and kitchen staff are far too often taken advantage of because they are reluctant to question employers about their pay and benefits,” George Victory, district director of the labor department’s wage and hour division in Columbus, said in the news release. “We are committed to ensuring that all workers receive their rightful wages and benefits.”
Columbus attorney Tim Owens, who represents El Rancho Grande and its owners, said Wednesday, “We intend to file an answer (to the lawsuit) denying the allegations.”
The restaurant chain cooperated with the investigation, turning over records and and providing federal investigators access to employees, Owens said. The labor department’s conclusion that El Rancho Grande’s Hispanic owners would discriminate against Hispanic employees “boggles my mind,” Owens said. And the department’s wage-and-hour division that conducted the El Rancho Grande investigation appears to be targeting the restaurant industry, according to Owens, who said he has done wage-and-hour legal representation for 28 years.
Labor department spokeswoman Rhonda Burke said the restaurant industry employs a large proportion of “vulnerable workers” who speak limited English and who are employed under sometimes-confusing wage rules, especially relating to servers who can be paid less than regular minimum wage. Some workers do not object to working long hours for sub-minimum or no-overtime wages, but that does not remove the responsibility of restaurant owners to follow U.S. employment laws, Burke said.
The El Rancho Grande investigation “is not part of a specific initiative” targeting the restaurant industry, Burke said. “But we’re always looking at restaurants, especially those that have vulnerable workers,” she said.
El Rancho Grande operates restaurants in Washington Twp., Fairborn, West Carrollton, Germantown, Vandalia and Middletown in addition to six locations in the Cincinnati area. Three of the chain’s restaurants — in Vandalia, Sharonville and one in Cincinnati — are accused in the lawsuit; the other nine are not.
Labor department investigators found that some kitchen workers at the three El Rancho Grande locations were paid a flat rate per week, which amounted to less than the minimum wage per hour, and were not compensated at time and one-half their regular rates for overtime hours worked beyond 40 per week, according to the department’s news release. Additionally, servers’ pay fell below the minimum wage due to deductions made for uniforms and because they were not paid for work performed both before and after their scheduled shifts, department officials said.
The violations occurred between February 2008 and September 2010, Burke said. Efforts to reach a negotiated settlement were unsuccessful, prompting the filing of the lawsuit, she said.
The lawsuit asks the court to order El Rancho Grande and its owners to pay all back wages, plus an equal amount in damages, all of which would go to the affected employees, Burke said.
The El Rancho Grande restaurant on Poe Avenue was shut down the entire first week of October for what Gary Rodriguez, El Rancho Grande’s president of operations, called at the time “a fresh start” that included a remodeled interior and new staff members, including new management and cooks. Rodriguez said Wednesday that the closing and changes at the restaurant had nothing to do with the labor department investigation or lawsuit.
Earlier this month, Rodriguez told the Dayton Daily News that El Rancho Grande was looking to add Dayton-area locations, possibly in downtown Dayton and in the Bellbrook area.
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