Restaurant Chain Pays Over $2M In Wage Theft Case

Daily City, CA (WorkersCompensation.com) -A settlement has finally been reached between the California Labor Commissioner and a Daly City restaurant. Kome Japanese Seafood & Buffet has agreed to pay  $2.6 million out to 133 workers for wages that were never paid as well as overtime and split shift premiums that were discovered in a 2018 wage-theft investigation. 

The Labor Commissioner’s Office launched an investigation into the restaurant after receiving complaints from employees.  The Office worked with the Chinese Progressive Association and Asian Americans Advancing Justice-Asian Law Caucus.

After the investigation and payroll audit, officials said 69 cooks, dishwashers, and sushi chefs typically worked over 55 hours each week and were only paid a fixed salary that did not include any overtime. Authorities say the employees were owed around $3 million in penalties and unpaid wages. With the inclusion of servers, bussers and hosts, employees were owed more than $1.4 million in overtime, unpaid minimum wage violations, split shift premiums, in addition to the illegal counting of tips received as part of the hourly minimum wage.

Investigators inspecting the Burmese restaurant chain also said 87 cooks that worked at the six restaurants were only paid a fixed salary and would usually log over 10 hours of overtime each week that went unpaid. After totaling everything up, those employees were owed 3.8 million for unpaid overtime wages, split shifts, minimum wages, waiting time penalties, liquidated damages, and failure to deliver accurate itemized wage statements.

The rest of the 211 servers, dishwashers, and bussers were not paid the extra daily hour of minimum wage required when working split shifts, and those workers were due $590,072 for wages, split shifts, and other penalties owed.

In June 2018, the commissioner’s office issued wage assessments and penalties of $5.16 million to the restaurant chain, including $4,381,461 for unpaid back wages and $780,400 for penalties. The civil penalties and wage theft violations included failure to pay workers minimum wages and overtime and split shift premiums. Last year, the unpaid back wages were lowered to $3,575,433, and the civil penalties were adjusted to $754,950, based on the evidence presented before the hearing.

The Final Settlement Agreement obtained by WorkersCompensation.com shows the restaurant chain agreed to the following:

1. The Third-Party Administrator shall distribute $132,800.00 to 13 individual tip claimants which represents the individual wage claim allocation of the Gross Settlement Amount. Each individual tip claimant shall be paid by check … and the amount for each individual tip claimant is based on the respective pro rate value of the worker’s individually filed tip claims.
2. The TPA shall distribute $17,200 to the retaliation claimant, which represents the allocation of the gross settlement amount, to be paid in two checks:  one for gross taxable wages of $8,600, less applicable employee-side payroll deduction and another for $8,500 for non-wage amounts.
3. The restaurant chain shall distribute $1 million to the affected employees, which represents the minimum wage, overtime, and split shift allocations of the gross settlement amount.
4. The TPA shall distribute $50,000 to the affected employees who were employed by the Employer for at least the last six months of the preceding 12 months from the date Kome closed its doors in January 2019.
5. Kome Japanese Seafood and Buffest shall distribute $645,000 to the remaining liquidated damages and waiting time penalty allocations to the affected employees.
6. The TPA shall distribute $55,000 to the Labor Commissioner.

“These workers have waited a long time for the wages they earned,” stated California Labor Commissioner Lilia García-Brower in a press release. “This settlement puts that money back in their pockets and is a testament to these workers standing up for their rights.”

A spokesperson for the Department of Industrial Relations tells WorkerCompensation.com that “checks for the employees have gone out.” Payments are said to range from $20 to $47,253, with an average of $14,217 per worker, including the $55,000 in civil penalties that is payable to the state.

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