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3 Michigan Barrio Tacos locations sued for $823k in back wages, damages

The U.S. Department of Labor has filed suit against three Barrio Tacos locations in Grand Rapids, East Lansing and Traverse City.
Credit: Barrio Tacos

GRAND RAPIDS, Mich. — Three Barrio Tacos locations in Michigan are being accused of wage violations by the U.S. Department of Labor, resulting in over $400,000 of back wages owed to 177 employees.

The labor department is seeking a total of $823,324, half of which is back wages, while the other half is liquidated damages caused by the wage violations.

GR Tacos LLC in Grand Rapids, Sparty Tacos in East Lansing and TC Tacos LLC in Traverse City all operate as Barrios Tacos and are owned by Jacob Hawley.

The complaint against the companies and its owner came after an investigation by the department's Wage and Hour Division.

The investigation alleges that the employer:

  • Required tipped workers to surrender a portion of their cash and credit card tips to managers after each shift. Managers then redistributed these tips to non-tipped employees, including kitchen staff.
  • Failed to pay tipped employees the federal minimum wage of $7.25 per hour.
  • Incorrectly paid tipped employees overtime based on the tip credit rate instead of the applicable minimum wage rate.
  • Failed to keep accurate records of employees’ hourly rates of pay and overtime premiums due.

The Wage and Hour Division's investigation also assessed Hawley and the restaurants $23,904 in civil penalties for the uncovered violations.

The complaint was filed in the U.S. District Court for the Western District of Michigan, Southern Division on Tuesday.

“Far too often, our investigators find restaurant industry employers violating the law when they fail to follow applicable wage laws for their employees. There are specific rules for paying tipped employees, for how tips must be distributed, for paying proper overtime and for keeping employment records,” explained Wage and Hour District Director Mary O’Rourke in Grand Rapids, Michigan. “Workers have the right to be paid fairly and fully for the jobs they do and employers must respect these rights.”

The suit alleges that the wage violations took place over an estimated two-year period leading up to the investigation.

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