Wage Theft Settlement Largest in San Francisco History

San Francisco, CAImagine working six-day weeks and 11-hours days for a wage of less than $4 per hour. Sadly, such an event was more than a figment of someone’s imagination for more than one California restaurant employee. In a blatant departure from overtime pay laws, Dick Lee Pastry Inc. was accused of over-working and under-paying their employees, with at least one employee also serving as a maid at the restaurant owner’s home.

According to a recent report in The San Francisco Chronicle (2/13/13), the municipal attorney for the City of San Francisco pursued the owners of Dick Lee Pastry Inc. citing violations of overtime laws, and accused the owners of wage theft, among other citations. At the end of the day, the enterprise was hit with a bill equaling $525,000 - the single largest amount secured by the City to date in pursuit of justice for wage theft.

According to The Chronicle report, Dick Lee Pastry operates an all-you-can-eat buffet that also features dim sum and pastries. The owners paid various employees a sum not exceeding $1,100 per month in exchange for time on the job ranging from 11 to 14 hours, six days per week. Not only were there violations of California overtime law, but the monthly stipend worked out to less than half the current San Francisco minimum wage of $10.55 per hour (at the time the overtime pay lawsuit was filed, the minimum wage was $9.92).

One employee embroiled in the unpaid overtime case articulated in the lawsuit that she habitually worked from 9 am to 9 pm - a total of 12 hours - but only ever saw three hours on her paycheck. The employee did indicate she at least took a lunch, so only worked 11 hours. But still, she was only paid for three.

After working five years at the restaurant, the unidentified woman finally quit her job in 2010, when her superiors would not allow her to take more than two weeks off to tend to an important child care issue involving her young son.

Another employee, who fell victim to low wages and unpaid overtime, also toiled at the owner’s home at night as a housekeeper following her duties bussing tables at the restaurant, or so it was alleged.

According to the unpaid overtime lawsuit, the owners of the restaurant issued to employees copies of work schedules that reflected no more than three hours of work per day, then issued paychecks reflecting pay for three hours per day at the requisite minimum wage. The remainder of the employee’s wage was paid in cash. As such, the only existing paper trail appeared to show the owners as operating within the confines of the law. The lawsuit alleged, and the settlement agreement suggests, they did not.

“We want to make sure that we’re sending a message that we’re serious about fighting wage theft and policing unfair competition,” said City Attorney Dennis Herrera, in comments published in The Chronicle. “No worker in San Francisco should be forced to work for less than minimum wage,” Herrera said. “And it’s not just about the workers. You have to make sure you have a level playing field for businesses.”

In the ensuing California overtime law settlement, owners Peter Yu and Ada Chiu agreed to pay the half-million-dollar-plus settlement as a means to avoid a much larger judgment of $1.5 million, combined with the potential for seizure of two properties. One of the employees will receive $89,000 in back wages, according to the terms of the settlement.