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Rancho Chico Restaurant Wage Judgment: Salaried Workers and $750,000 Liability

A federal judgment involving Rancho Chico restaurants illustrates why paying workers a fixed salary does not eliminate minimum-wage and overtime duties. The resolution covered 42 employees.

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Rancho Chico Restaurant Wage Judgment: Salaried Workers and 0,000 Liability

Quick answer: Salaried nonexempt restaurant employees must receive minimum wage for every hour and overtime after 40. A fixed salary can become unlawful when divided across very long schedules.

The June 2026 judgment

A federal court required four Washington-based restaurants to pay $750,000 in wages and damages to 42 workers after a Wage and Hour Division investigation.

The Department also reported retaliation and child-labor violations.

Salary below minimum wage

A weekly salary must be divided by the hours it covers. When employees work extremely long weeks, the resulting hourly rate can fall below $7.25 federally or a higher state minimum.

Overtime remains due

Nonexempt salaried workers must have a regular rate calculated under the pay agreement. Overtime is then due for hours over 40.

A manager title does not establish exemption without qualifying duties and salary treatment.

Retaliation

The Department alleged that a worker was terminated after filing a wage complaint. Federal law prohibits retaliation for protected wage activity.

Restaurant audit

Frequently Asked Questions

Can salaried restaurant workers receive overtime?

Yes, when nonexempt.

Can salary fall below minimum wage?

Yes.

Does a manager title create exemption?

No.

Must salaried nonexempt hours be tracked?

Yes.

Can an employer fire a complainant?

Protected wage complaints cannot lawfully trigger retaliation.

Official Sources

This article is for general educational purposes and is not legal, tax, accounting, payroll, or employment advice. Rules can change and may differ by state, locality, occupation, employer, and employee circumstances.

Reviewed for accuracy by the OvertimePayUSA editorial team using official labor sources such as the U.S. Department of Labor and state agencies.
Official Sources

This calculator is for educational purposes only. Consult your employer or a labor attorney for advice specific to your situation.

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Frequently Asked Questions

Can my employer require me to work overtime?
Yes. Employers can require overtime work. However, they must pay the required overtime premium (1.5x or higher per state law) for hours over the threshold. Refusing to work overtime may result in termination, but employers cannot refuse to pay overtime premiums that are legally owed.
What should I do if I think I'm owed unpaid overtime?
Document everything: save pay stubs, time records, emails, and any communications about hours worked. Calculate what you believe is owed. Contact your employer in writing first. If they don't respond satisfactorily, file a complaint with your state Department of Labor or the U.S. Department of Labor Wage and Hour Division. Consider consulting an employment attorney for large amounts.
Is my salaried position automatically exempt from overtime?
No. Many salaried positions still qualify for overtime pay. Exemption requires: (1) earning above the minimum threshold (~$35,500 federally, varies by state), and (2) spending more than 50% of time in exempt duties (executive, professional, administrative). If unsure, file a wage claim or consult an employment attorney.
Can I get overtime pay if I work multiple jobs?
Federal overtime laws (FLSA) typically count only hours for a single employer. However, some states have more generous rules. Hours worked for different employers at the same time usually don't combine for overtime purposes unless you're an independent contractor. Check your state's Department of Labor for specific rules.
What's the statute of limitations for claiming unpaid overtime?
Federally, you have 2-3 years to file a lawsuit for unpaid wages (3 years for willful violations). State laws vary: California allows 3-4 years, New York allows 6 years. For administrative complaints, the timeframe is often shorter (1-2 years). Act quickly if you believe you're owed wages.
Do I have to be paid for meal breaks?
If you work during a meal break or cannot take a true break away from your workstation, that time must be paid. If you take an actual, uninterrupted break (usually 20+ minutes), it can be unpaid. Rules vary by state—check your state's Department of Labor for specifics.
Can an employer fire a complainant?
Protected wage complaints cannot lawfully trigger retaliation.
⚖️ Statutory Legal Authority: Overtime pay calculations strictly follow the Fair Labor Standards Act (FLSA), 29 U.S.C. § 207 and U.S. Department of Labor (WHD) Regulations 29 C.F.R. Part 778. State daily overtime rules comply with California Labor Code § 510, Colorado COMPS Order #38, and Alaska Stat. § 23.10.060.