Don Pancho chain to pay $563,350 in back wages over keeping servers’ tips, other violations

Update, 3 p.m.: The Mt. Juliet location is under new ownership. Dan Carroll bought the Don Pancho from the previous owners on Jan. 1, 2020, according to his son, Travis Carroll, the general manager.

Any violations that investigators uncovered at the Mt. Juliet location took place prior to the new owner purchasing the restaurant, Travis Carroll said.

Previously:

CLARKSVILLE, Tenn. (CLARKSVILLENOW) – Don Pancho Mexican Restaurant will pay $563,350 in back wages to 120 employees after an investigation found minimum wage, overtime and recordkeeping violations of the Fair Labor Standards Act (FLSA).

The Clarksville-based restaurant chain’s violations happened at three locations in Mount Juliet, Ashland City and Jackson, according to a news release from the U.S. Department of Labor.

The department also assessed the restaurant a $683 civil penalty for violating the child labor provisions of the FLSA.

Don Pancho opened in Clarksville in May 2002, but in March 2018 the owners parted ways, according to the Don Pancho Mexican Restaurant website. The Don Pancho Sango location is no longer part of the chain ownership group.

Chain owners could not be immediately be reached for comment Friday morning.

The violations

Wage and Hour Division investigators determined Don Pancho kept a percentage of servers’ tips to offset the restaurant’s expenses, in violation of minimum wage requirements. The law prevents employers from keeping workers’ tips. Don Pancho also failed to record all of the hours employees worked, resulting in the employer’s failure to pay for those hours, triggering additional violations, the release said.

Don Pancho also paid some kitchen workers flat salaries, regardless of the number of hours that they worked. This practice resulted in violations when those employees worked more than 40 hours in a workweek, but the employer failed to pay them overtime. Similar violations occurred for employees paid flat daily rates regardless of the number of hours they worked. WHD also found the employer failed to maintain records of cash payments made to employees, resulting in a recordkeeping violation.

The investigation also found that Don Pancho violated child labor requirements by employing a 15-year-old to work outside of the hours allowed by law for that age group. WHD investigators determined the employer allowed the minor to work more than 18 hours during a school week, more than 40 hours in a week while school was not in session, more than three hours on a school day, more than eight hours on a non-school day, and later than 7 p.m.

How to report violations

“Employers must pay their workers all the wages they have legally earned. We encourage them to contact the Wage and Hour Division with questions about how to pay a tipped employee, or any other wage requirements, so that they fully understand their responsibilities,” said Wage and Hour Division District Director Nettie Lewis, in Nashville. “This investigation’s outcome reminds all employers to review their pay practices to ensure they are paying their workers as the law requires and demonstrates that the U.S. Department of Labor is committed to leveling the playing field for employers that play by the rules.”

The department offers numerous resources to ensure employers have the tools they need to understand their responsibilities and to comply with federal law, such as online videos and confidential calls to local WHD offices.

For more information about the FLSA and other laws enforced by the Wage and Hour Division, contact the toll-free helpline at 866-4US-WAGE (487-9243). Employers that discover overtime or minimum wage violations may self-report and resolve those violations without litigation through the PAID program. Information is also available at https://www.dol.gov/agencies/whd.