In the Hibachi Grill & Supreme Buffet case, the U.S. Department of Labor (DOL) has sued to recover nearly $2 million in unpaid wages and damages for 84 employees.
Specifically, the lawsuit is against Wang’s Partner Inc., doing business as Hibachi Grill & Supreme Buffet, and its owner, Shu Wang. The suit seeks to recover $1,997,726.
The lawsuit was based on an investigation by the department’s Wage and Hour Division, which revealed numerous violations of the Fair Labor Standards Act (FLSA). The suit alleges that Hibachi Grill & Supreme Buffet:
- Misclassified servers as independent contractors.
- Failed to pay servers and kitchen staff at least the federal minimum wage of $7.25 per hour.
- Failed to pay overtime compensation at time and one-half employees’ regular rates for hours worked beyond 40 in a workweek.
- Failed to maintain accurate records of hours worked and wages paid.
“This lawsuit illustrates that the department will use every enforcement tool necessary to resolve cases where employees are unlawfully treated as independent contractors, and vulnerable workers are not paid the minimum wage,” said Secretary of Labor Thomas E. Perez.
The case is a good illustration of how small numbers add up in these cases. We don’t know the particulars, and the issues are more complicated than this, but if 84 employees are underpaid by $1.25 an hour and work 50 hours a week for 50 weeks a year over 2 years, that’s $525,000 right there. And then the overtime adds about $300,000 more. Double it and add some fines and fees and it’s pretty easy to get to $2 million.
As for the misclassification of workers as independent contractors, the DOL notes that misclassified employees are often denied access to critical benefits and protections, such as family and medical leave, overtime, minimum wage, and unemployment insurance. Employee misclassification also generates substantial losses to state and federal treasuries (taxes), and to the Social Security and Medicare funds, as well as to state unemployment insurance and workers’ compensation funds.
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