Waukesha-Area Restaurant Chain Owes $272K In Back Wages: Feds

WAUKESHA, WI — A restaurant chain with four locations around the Waukesha area and beyond owes over $272,000 in back wages to its cooks, servers and other employees—around 110 in total—who were denied earned pay and tips, the U.S. Department of Labor announced Monday.

Casa Tequila, which has locations in Pewaukee, Waukesha, West Bend and Hartford, also violated several other labor regulations including child labor law by employing three minors longer than allowed, according to the DOL.

The DOL Wage and Hour Division investigated the four restaurants and determined Casa Tequila LLC, based out of Pewaukee, and its owner Maria Campuzana, operated an invalid tip pool at the Pewaukee restaurant, failed to pay overtime when required and sometimes miscalculated overtime pay, according to a news release. The restaurants owe employees $272,177 altogether in back wages, the DOL said.

According to the Department of Labor: At the Pewaukee location, 38 employees were affected and owed over $140,000 in back wages. At the location in West Bend, 22 employees are owed over $52,000. Meanwhile, 28 employees at the Waukesha location are owed over $51,000 and 22 workers at the Hartford location are owed over $28,000.

The business was one of many that benefitted from the federal Paycheck Protection Program, according to an online database published by ProPublica. Casa Tequila Restaurant LLC had $74,500 in federal loans approved April 9, 2020, which were later forgiven Aug. 19, 2021, according to ProPublica. The investigative news agency showed loans forgiven for all four Casa Tequila locations.

“Violations like those found in our investigation of Casa Tequila are all-too-common in the food service industry,” said Wage and Hour Division District Director Kristin Tout in a news release. “Restaurants often employ people unfamiliar with their legal rights and protections as workers and who may be fearful about raising or reporting their concerns. Workers concerned about their employer’s pay practices can contact the Wage and Hour Division, anonymously if they prefer, to ask questions and to understand their rights better.”

Investigators said the restaurant violated the Fair Labor Standards Act's minimum wage, recordkeeping, and child labor provisions in a host of ways, including through the invalid tip pool in Pewaukee that included kitchen staff and cooks.

"By doing so, the employer lost its ability to claim credit for tips toward its minimum wage and overtime obligations for tipped employees, such as servers," the DOL wrote.

Other violations included basing the overtime rate to tipped employees on their cash wage instead of minimum wage plus failure to include all compensation that Pewaukee cooks earned for their average hourly rate, the Department of Labor said.

The restaurants also paid straight-time rates instead of time-and-one-half for weeks totaling over 40 hours, and employed three children between the age of 14-15 for longer than eight hours at once and past 9 p.m. in West Bend and Waukesha, violating child labor standards, according to the DOL.

The investigation also landed a $2,373 civil penalty on Casa Tequila, the DOL said.

"Restaurant operators are legally required to understand and comply with federal laws governing how tipped and hourly workers’ wages must be paid and how young workers can be employed safely with a schedule that does not interfere with their education or well-being,” said Tout. “Employers who fail to comply will be held accountable and the Wage and Hour Division will do everything in its power to recover wages owed to employees.”

Industry employers can avoid violations, the DOL said, by reviewing the Wage and Hour Division "Quick Service Restaurants Compliance Assistance Toolkit."

The restaurant chain was not immediately responsive to Patch's requests for comment. We'll update this story if we hear back.