Maria Armendariz is also accused of not paying workers overtime at her eatery, Lorenzo & Maria's Kitchen, on Manhattan's Upper East Side.
The lawsuit was filed March 8 by ex-employees Inelia Gabriela Ortega and Enriqueta Luna, who claim they worked at the establishment for 12 years on shifts that were approximately 14 hours per day with only one day off a week.
"She told me I was an a**faced Mexican, and that I came to the U.S. to rob Americans' money," Luna charges.
In the court documents, Luna alleges Armendariz -- "who is light-skinned and is from Uruguay" -- would regularly call Luna "an old, fat woman with a 'big a--' that was 'darker than a donkey.'"
Armendariz's boyfriend Nicodemus Pedraza, is accused in the lawsuit of exposing himself to -- and propositioning -- Luna with no consequence from Armendariz.
"The woman told me that I was crazy, that I was a hag," Luna tells DNAInfo.com. "I was always very respectful: I wasn't trying to provoke my boss or her boyfriend."
Ortega alleges similar abuse in her dealings with Armendariz and Pedraza.
"She would call me the 'whore of the house,'" Ortega, 57, claims. "She said that I was going to rob her -- that I came to America to steal."
Ortega alleges that she was also sexually harassed by Pedraza in the form of goosing, and was chastised by Armendariz when she groused of the treatment.
"She said it was our fault, because we're 'loose women.'" she claims.