One popular fast-casual Mexican restaurant chain recently got into some hot water. On Wednesday, the U.S. Department of Labor’s Wage and Hour Division announced that Tacos Chukis, known for its excellent wallet-friendly tacos and tortas, with four Seattle locations, recently had to pay out $419,459 to 92 employees for violating overtime requirements.
The labor department said that Tacos Chukis failed to pay employees overtime when they worked more than 40 hours in a week, while also failing to combine hours that some employees worked at multiple locations. In perhaps the most inflammatory accusation, the investigation claims that Tacos Chukis “artificially” divided hours when employees worked more than 40 hours at a single location to make it appear as though those hours were put in at two separate outposts.
Eater Seattle reached out to Tacos Chukis for comment and received the following statement:
Some of our employees who wanted more hours asked to work at a second Tacos Chukis location, and in doing so worked more than 40 hours a week. We did not know that, legally speaking, hours from one location would be combined with the second, and so we paid straight time rates for what we did not realize were overtime hours.
This was our mistake. We were trying to help our employees and were tripped up by overtime pay rules we did not fully understand. We have now paid twice the unpaid overtime, so this was an expensive lesson. We apologize for our mistake, it will not happen again. We always try to do right by our terrific employees, including paying well above market rates. We appreciate their understanding and yours too.
When asked directly about the accusation that the chain “artificially” divided hours at two locations, Tacos Chukis added, “Due to limited kitchen space and capabilities at certain locations we often have to prep at another location. The mistake was allocating those hours to the locations that food was being prepped for instead of combining them.”
This investigation comes at a dicey time for Seattle restaurants regarding labor practices, in general. Just a couple of months ago, restaurateur Tom Douglas settled a $2.4 million dollar lawsuit with employees over allegedly not properly disclosing where service charge fees were going, a year after chef Josh Henderson settled a similar $1 million lawsuit. Meanwhile, last week, the Seattle Times published a detailed report on the possibly contracting restaurant scene, which some restaurants have blamed on the increased minimum wage and the associated labor costs — though the piece discusses how the issues are much more complicated than that.