The Labor Commissioner’s Office has reached a $1.6 million settlement with the owners of Z & Y Restaurant in San Francisco, securing compensation for 22 workers for unpaid minimum wages, overtime, split shift premiums and tips identified in a wage theft investigation from 2019. Including expected post-settlement interest, each worker will receive on average approximately $73,000 under this settlement from payments that began today after the employer entered into an agreement with the Labor Commissioner’s Office.
“California law prohibits employers from taking tips left by customers for servers,” said California Labor Commissioner Lilia García-Brower. “Under this settlement, the employer will pay workers back all of those stolen tips totaling over $400,000.”
The Labor Commissioner’s Office learned of the potential violations in January 2019 after receiving a referral from the Chinese Progressive Association and Asian Americans Advancing Justice – Asian Law Caucus.
The investigation found that 22 servers and kitchen workers were not paid properly. The servers were paid hourly and the kitchen staff were paid a fixed salary that was below minimum wage and did not include overtime. The employer illegally kept tips left for the servers and did not pay servers split shift premiums when they were scheduled to work both the lunch and dinner shifts.
In April 2020, the Labor Commissioner issued wage assessments and penalties totaling over $1.4 million to the owners of Z & Y Restaurant Inc. The employer appealed the citations.
In September 2020, the Labor Commissioner filed a lawsuit to prosecute the restaurant owners for violations not covered by the citations, including the theft of tips, violations of California’s Paid Sick Leave law and record keeping violations. With the hearing on the citation appeal approaching, the employer reached a settlement with the Labor Commissioner that resolved the citations, the lawsuit, and pending wage claims that had been separately filed by four workers represented by the Asian Law Caucus.
Notification has been delivered to the current and former restaurant workers of their expected settlement payments and workers began receiving settlement payments with an average of approximately $73,000 per worker based on the number of hours worked during the audit period and the tips that were appropriated by the employer. The settlement also includes $9,550 in civil penalties payable to the state.
“A significant amount of the payment due to workers in this case is from stolen tips,” added Labor Commissioner García-Brower. “Workers must be proactive to protect their rights. Keep track of the tips you think you should have received to help support your claim and when approaching your employer about this issue, document the conversation and have a witness.”