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Mason City restaurant must pay employees over $100,000 in back pay

Federal investigators say they violated minimum wage and overtime rules.

Posted: Nov. 28, 2018 3:33 PM
Updated: Nov. 28, 2018 10:51 PM

MINNEAPOLIS, Minn. – A North Iowa restaurant will have to pay back wages to 26 employees after an investigation by the U.S. Department of Labor.

The Department’s Wage and Hour Division says Las Palmas Mexican Restaurant in Mason City must pay $129,714 because of violations of federal minimum wage, overtime, and recordkeeping requirements.

Three restaurants in Minnesota will also have to pay back wages:

La Terraza Mexican Grill and Bar in Mankato - $160,182 to 26 employees.

Plaza Garibaldi in Redwood Falls - $151,269 to 30 employees.

Plaza Garibaldi Authentic Mexican Restaurant in New Ulm - $390,067 to 31 employees.

Federal investigators say the found the restaurants required workers to “kick back” their hourly pay in some instances and only work for tips. Hourly employees were also sometimes paid flat salaries without regard for hours worked or overtime. The restaurants also deducted the cost of uniforms from servers’ wages and failed to record and pay employees for some of the hours they worked.

“Employers must pay their employees the wages they have legally earned,” said Wage and Hour Division District Director David King in Minneapolis. “We encourage employers to make use of the many tools the Wage and Hour Division provides to help them understand their obligations, and to contact us for assistance.”

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