$10 Million in Citations Against Seven Restaurants For Wage Violations

On June 7, 2018, the California Labor Commissioner announced citations totaling $10 million against seven San Francisco bay area restaurants that failed to pay proper wages to a total of 431 workers.

Citations against Kome Japanese Seafood & Buffet in Daly City exceeded $5.16 million for 133 workers. Kome had been paying 69 dishwashers, cooks, and sushi chefs a fixed salary with no overtime even though their hours exceeded 55 per week, resulting in nearly $3 million in penalties and unpaid wages. The Labor Commissioner also awarded over $1.4 million to hosts, servers, and bussers for violations of minimum wage, overtime, and split shift premiums.  Although tips legally belong to the worker who receives them, Kome had been deducting tips from the worker’s wages in order to offset its minimum wage obligations.

Additionally, the Labor Commissioner imposed $4.96 million in citations against Burmese Ruby Burmese Cuisine in Palo Alto and Rangoon Ruby Burmese Cuisine restaurants in five northern California cities for similarly underpaying 298 workers.

In announcing these awards, the Labor Commissioner warned: “Taking tips from workers and paying workers by salary to deny them their hard-earned overtime pay is wage theft.  Our job is to protect working people’s right to a just day’s pay for a hard day’s work, and to stop employers who embrace wage theft as a business model.”

These cases were initiated after civil rights organizations received complaints from restaurant workers and reported those to the Labor Commissioner. They follow other recent cases with similar origins. See, January 9, 2018 News Release. These awards continue the Labor Commissioner’s vigorous pursuit of companies that engage in wholesale violations of wage and hour laws.

In her press release, the Labor Commissioner stated: “Workers often do not know their rights and fear losing their jobs for complaining about wage theft. We work with community-based organizations that help workers report labor law violations.”

These cases are a warning that all business owners should confirm and comply with their legal obligations for paying employees under state, federal, and local laws. Employers of workers who receive tips from customers should be aware that those monies belong to the employees who receive them and that they are not to be counted against the employer’s wage obligations. See, Labor Code 351.

For further information, please contact one of our attorneys: Tim Bowles, Cindy Bamforth, or Helena Kobrin.

Helena Kobrin

June 22, 2018