U.S. Labor Department wins $750,000 wage judgment against Washington restaurants

Wage mistakes at a restaurant group in Washington turned into a $750,000 federal judgment, a sharp reminder that payroll shortcuts can become legal, financial and reputational liabilities fast. A court in the Eastern District of Washington entered the consent judgment against Rancho Chico after investigators found violations at locations in Spokane, Colville and Omak. The order covers 42 workers and forces the owners to pay back wages and damages.

The U.S. Department of Labor said Nolberto Rodríguez and Guillermina Rodríguez, who own Blanco Inc. and Mi Rancho Chico Inc., failed to pay time and one-half for hours worked over 40 in a workweek. Investigators also found that some nonexempt employees were put on salary for all hours worked, a practice that pushed pay below the federal minimum wage of $7.25 an hour. The case also included unlawful retaliation after one worker who filed a wage complaint was terminated, along with violations of federal child labor rules that bar minors from operating hazardous equipment.

After the Rodríguezes initially agreed to pay the back wages, they did not follow through, prompting the department’s Office of the Solicitor and the U.S. Attorney’s Office for the Eastern District of Washington to seek a federal court order compelling payment. Under the judgment, Rancho Chico and the owners must pay the full $750,000 and comply with federal labor law going forward, including paying workers for all hours worked, keeping accurate records and not retaliating against employees who raise wage concerns.

For restaurant operators and frontline managers, the lesson lands close to home. The same breakdowns that drive this case, missed overtime, sloppy timekeeping, off-the-clock work and confusion over who is exempt, are the kinds of problems that can start in a single store and spread across a franchise system. That is especially true in quick-service kitchens and delivery operations, where schedules change fast, drivers track tips and shifts run late if closing work is not recorded correctly.

Andrew Rogers, the Wage and Hour Division administrator, said employers should regularly review pay practices, seek compliance assistance and fix violations immediately. Marc Pilotin, the department’s regional solicitor, said the owners had promised to make things right but did not. The Labor Department says restaurant and fast food businesses with annual gross sales from one or more establishments totaling at least $500,000 are covered by the Fair Labor Standards Act, which sets minimum wage, overtime, recordkeeping and youth employment standards for most private-sector workers.

The judgment also fits a broader enforcement pattern. In 2023, the Labor Department said it recovered $11.4 million in back wages and liquidated damages for more than 1,000 employees of an East Coast restaurant chain. For Pizza Hut workers, that is the warning: if local managers do not audit payroll, scheduling and tip records before regulators do, the price can be steep and public.