St. Petersburg’s Red Mesa restaurants are accused of violating labor laws, according to the U.S. Department of Labor.
Federal investigators probed Red Mesa Restaurant and Red Mesa Cantina and found that owners and management withheld tips from servers and bartenders to pay for customers who left without paying their bills, according to a media release. Workers lost between $10 to $175 in tips per day, the release said.
The restaurants, which serve Mexican fusion food, are also accused of deducting work uniforms from employee paychecks. In some cases, server paychecks were less than the required minimum wage, which is illegal under the Fair Labor Standards Act, the release said. Red Mesa also didn’t combine hours when employees worked at both locations within a week, resulting in them not receiving overtime pay.
The Department of Labor said they recovered $190,730 in lost wages and damages, which affected 89 workers.
Even though Red Mesa Cantina is under a separate corporation name — Veytia Ventures LLC — from Red Mesa Restaurant, the restaurants are still considered a “single enterprise” because they have the same owner. Red Mesa Mercado, also owned by Veytia, was not named in the investigation.
“In this case, the employer assigned employees to work at two locations they owned. They should have added the hours worked at these locations together and paid overtime when the combined hours exceeded 40 hours in the same workweek,” said the Department of Labor Wage and Hour District’s director in Tampa, Nicolas Ratmiroff, in a statement.
Operating businesses under different corporations does not excuse the employer from separating their paychecks under federal law, Ratmiroff said. The original Red Mesa Restaurant at 4912 Fourth St. N opened in 1995 and later expanded with the opening of Red Mesa Cantina in downtown St. Petersburg at 128 3rd St. S. The fast-casual Red Mesa Mercado opened in 2014 in the city’s Edge District.
Red Mesa also faces allegations of not paying kitchen staff overtime and not properly recording payroll records, federal officials said, keeping some workers off the books.
The Fair Labor Standards Act was established in 1938 to protect a worker’s right to a minimum wage, which in Florida is $11 per hour. It also requires employers to pay overtime at “time and a half” per hour for working more than 40 hours in a week.
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Veytia said in an emailed statement after the publication of this article that the investigation took place in 2021, and in the next year, Red Mesa doubled the amount owed to employees to “make things right.”
“We were extremely distressed to learn about this situation in 2021, and have aggressively taken far-reaching steps to make sure something like this never happens again. As part of this process, we terminated the outside firm that had handled this part of Red Mesa’s business,” Veytia stated.
“As a family-owned, local business, we know we would never succeed without our high-quality employees. We want our employees to know they are being treated fairly every day.”