The restaurant owners failed to pay overtime and keep records of hours worked.
The owners of Fusion Japanese Steakhouse were ordered to pay $1.45 million in back wages and damages after failing to properly pay 116 current and former workers, according to a recent federal court decision.
The violations, conducted by owners Yuan Zheng Xiao and Christine Xiao, occurred between October 18, 2014, and October 7, 2017 at three restaurants: Washington, Pennsylvania; and Vienna and Triadelphia, West Virginia. The complaint was filed in March 2019.
Court documents state restaurants didn't compensate workers—cooks, sushi and hibachi chefs, dishwashers, bussers, and servers—who worked more than 40 hours in a week at one and a half times their regular rates. In fact, many employees averaged between 50-60 hours per week. The owners also didn't keep records of how many hours their kitchen employees worked, or their full names, addresses, occupations, sex, regular rates of pay, straight-time wages earned, and other key measures.
"Defendants either knew or acted with reckless disregard as to whether their compensation practices for kitchen employees of the Fusion Restaurants violated the overtime provisions of the Act," court documents state.
In addition to the $1.45 million, Yuan Zheng Xiao and Christine Xiao must pay $76,124 in civil money penalties for intentionally disregarding the Fair Labor Standards Act (FSLA). The restaurateurs will have to cover the total penalty, plus 1 percent interest, unless it's all paid within 30 days.
This isn't the first offense either. Following investigations in 2010, 2011, and 2013, Yuang Zheng Xiao was ordered to pay back wages after violating the FLSA's minimum wage, overtime, and recordkeeping provisions.
“This legal action recovers the workers’ hard-earned wages and sends a strong message to other restaurant employers that violations come at a high cost,” Solicitor of Labor Seema Nanda said in a statement. “The U.S. Department of Labor is prepared to use every tool available, including litigation, to prevent employers from depriving workers of their wages.”
Jessia Looman, acting Wage and Hour Division administrator, said retaining and recruiting workers is more difficult in today's job market, and that it will be made even harder if employers violate the legal rights of their employees. To Looman's point, the Bureau of Labor Statistics projects 958,000 food and accommodation services workers left their positions in December 2021 and predicts 41,400 openings for foodservice managers each year from 2020 to 2030.
“Wage theft is illegal, it harms workers and their families, and undercuts responsible employers who abide by the law,” Looman said in a statement. “This sizeable judgment on behalf of restaurant workers demonstrates the Department of Labor’s commitment to protecting these essential workers.”
The consent judgment follows an investigation by the division’s Pittsburgh District Office and litigation by the Regional Solicitor’s Office in Philadelphia. The judgement was entered by the U.S. Court for the Western District of Pennsylvania.