Workers due nearly $600K from Mexican restaurant chain that operates in State College

More than three dozen people who worked at a Mexican restaurant chain in State College are owed nearly $600,000 after the business admitted to flouting labor laws, the Labor Department said Thursday.

Plaza Azteca — which operates Plaza Mexican Bar and Grill at 1550 S. Atherton St. — denied minimum and overtime wages to 1,320 workers at more than 40 locations. That includes 41 people who worked at the State College location.

The business will pay $11.4 million in back wages and penalties.

“Our investigators found Plaza Azteca knew of its legal obligations to pay workers minimum wage and overtime and keep accurate payroll records and yet, willfully disregarded federal law,” Wage and Hour Administrator Jessica Looman said in a statement. “... The court’s action in this case is an important step in our efforts to make a meaningful difference in the lives of these workers by recovering their hard-earned wages.”

Plaza Azteca restaurants paid back-of-the-house workers predetermined amounts. By doing so, the business failed to pay some employees the required minimum wage and did not pay others time-and-a-half when they exceeded 40 hours worked in a week.

Plaza Azteca also failed to maintain accurate records of employees’ work hours and wages as required. The Labor Department described the violations as repeated and willful.

“Plaza disputes it violated the law but reached a resolution with the DOL to bring closure to this matter and allow the business to continue to focus on being a great employer and providing an excellent customer experience,” attorney Luis Santos wrote in a statement.

The business, according to the agreement, has been in compliance with federal labor laws since January 2022. The State College location opened in 2016.

“This outcome sends a strong message to other restaurant industry employers of the costly consequences that can occur when they deprive employees of their full and rightful wages,” Labor Solicitor Seema Nanda said in a statement. “As we did in this case, the U.S. Department of Labor will strategically deploy our investigative and litigation resources to remedy systemic violations of the law at a national scale across an enterprise’s locations.”

The agreement requires Plaza Azteca to retain for two years an independent consultant, whose job would be to ensure certain locations’ payroll and record-keeping are in compliance with federal law.

Back wages and damages are due to current and former workers regardless of their immigration status, the Labor Department wrote. Workers may call 215-861-5180 if they have questions. Wages not claimed by an employee within three years will be deposited with the Treasury Department.

The business’ final payment is due Nov. 27.