PORTSMOUTH, Va. (WAVY) — Popular Mexican restaurant chain Plaza Azteca has agreed to pay $11.4 million in back wages and damages to more than 1,000 employees following an investigation by the U.S. Department of Labor.

Roberto Melendez, U.S. Department of Labor’s Director of the Richmond District Office, told 10 On Your Side the investigation started in September of 2019. The agency looked at records from 2016 to 2020.

“We conducted a review of record and interview and we found workers weren’t being compensated for the hours they were working over 40 in a week,” he said.

The Labor Department announced on Thursday the consent judgment came after months of litigation and just before a jury trial was set to begin. The probe included more than 40 restaurants owned by Ruben Leon across Virginia, North Carolina, Connecticut, Maryland, Massachusetts, New Jersey and Pennsylvania.

Melendez said more than 20 of those restaurants are in Hampton Roads.

“It is concerning. It is considered a low-wage earning industry. Often time we see the restaurant industry fail to properly compensate employees, making it even harder for workers to do things like pay their rent,” Melendez said.

The Labor Department said numerous Plaza Azteca Mexican restaurants paid predetermined amounts to back-of-the-house employees, failing to pay some employees the required minimum wage for up to 40-hour work weeks and time-and-a-half for hours over 40 in a work week.

“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,” said DOL Wage and Hour Administrator Jessica Looman. “The employers failed to pay full wages to more than 1,000 employees. 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.”

Melendez said the Department wants to ensure compliance with labor laws.

“In today’s day and age, where people are having a hard time earning a decent wage, we want to ensure employers are paying all their workers what they are earning and they are paying in compliance with the labor laws,” Melendez said.  

The judgment also recovered $625,000 in civil money penalties from Plaza, “due to the repeat and willful nature of the violations.”

Solicitor of Labor Seema Nanda said this outcome sends a strong messages to other employers of what can happen when they deprive workers of their earned wages.

“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,​” said Solicitor of Labor Seema Nanda. “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 Labor Department said the damages are due to certain current and former employees of Plaza Azteca restaurants, regardless of their immigration status. You can contact the DOL’s Wage and Hour Division at 215-861-5180 with any questions. 

Plaza Azteca has more than a dozen locations in Hampton Roads, with another in Kill Devil Hills on the Outer Banks.