An employee grabbed my wife’s butt multiple times at work! What does my employer have to do about it. What are her rights?

It's not clear from your post whether this was the first time this happened, and that makes a difference. If it WAS the first time the employee has done this, and your wife reported the incident to the employer, then the employer is required to take "reasonable steps" to prevent the conduct from occurring. If this was NOT the first occasion this has occurred, and your wife reported the prior occasion, then legally, the employer is responsible for the second (and future) acts of harassment. If your employer is responsible, then your wife will have to start by filing an EEOC charge of discrimination (sexual harassment is sex discrimination).