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California Restaurant Ordered to Pay Workers Nearly $404K in Back Wages, Damages

March 18, 2012

In a recent California wage and hour lawsuit settlement that our Costa Mesa employment lawyers been watching, a U.S. district court judge has ordered a Chinese restaurant in Sunnyvale, California, to pay 32 employees around $404,000 in damages and unpaid wages, after the employer reportedly violated minimum wage and overtime payment provisions of the Fair Labor Standards Act (FLSA).

According to the U.S. Department of Labor (DOL), who brought the case against the restaurant, United Buffet, Inc., operating as Crazy Buffet under manager Zhou Ni, was found to have issued paychecks to restaurant employees, but illegally demanded that the wait staff to return their wages, keeping only their tips for compensation. Crazy Buffet was also found to have failed to compensate workers for any overtime hours worked beyond forty in a week of work--even though the average work week for the employees was 60-72 hours per week. The employer was also found to have falsified the payment, time and attendance records for the employees--a violation of the FLSA.

The restaurant industry continues to be a high priority for the DOL's Wage and Hour Division, due to the nature of the low-wage industry, and the number of vulnerable employees that work for the industry--especially workers who are immigrants, or who have limited skills in the English language and who are unaware of their rights. As Vincent Howard often reports in our Irvine employment lawyers blog, federal labor law violations pose a constant threat to low wage industries across the country--when employers fail to comply with the overtime, minimum wage compensation and record-keeping provisions of the FLSA. When employees experience wage theft, or some form of a pay-related violations where money is kept from them, this results in money being kept from their families, communities, and even the government.

According to the DOL's Wage and Hour Division District Office in San Francisco, Crazy Buffet failed to show any concern for its employees and for federal labor and employment laws. The DOL reportedly asked Judge Ronald M. Whyte to approve their request for a default judgment in the wage and hour lawsuit--after the restaurant refused to pay $44,569.63 in unpaid minimum wages and $157,380.37 in overtime payment that resulted in these violations of the FLSA. The restaurant will pay the employees the $201,950 in back payment as well an equal monetary amount in liquidated damages.

In addition to awarding the back payment and monetary damages to the employees, the court granted the DOL's request for an injunction that will prevent the employer from committing FLSA violations in the future, as well as another injunction against the continual withholding of compensation that remains unpaid.

Under the FLSA, employers are required to pay nonexempt employees the minimum wage of $7.25 per hour for all hours worked, plus time and one-half the workers' normal pay rates for each hour worked over forty hours in a workweek, which includes bonuses, commissions and incentive compensation. As Vincent Howard reported in a recent Anaheim employment lawyers blog, the FLSA requires that tipped employees are compensated with the minimum wage of $2.13 in hourly wages, as long as the tips received totals at least $7.25, the federal minimum wage. If the combined tips and direct wages of an employee do not equal the minimum wage, then the employer is required to make up the compensation difference.

In San Clemente, Seal Beach and Tustin, California, contact Howard Law's managing attorney Vincent Howard and our labor and employment legal team today, to discuss your wage and hour issue, so we can help find the best solution for your recovery.

Judge orders Sunnyvale, Calif., restaurant to pay workers nearly $404,000 in unpaid wages, damages following US Labor Department investigation, U.S. Department of Labor Press Release, March 15, 2012

Related Web Resources:

The Department of Fair Employment and Housing (DFEH)

U.S. Department of Labor: Wage and Hour Division (WHD), Fair Labor Standards Act (FLSA)

Department of Labor (DOL): Wage and Hour Division (WHD)

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