Monday, June 24, 2024

Owner of L.A. Restaurant Chain Must Pay $1.65 Million in Withheld Wages

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The owner of the popular Los Angeles Thai restaurant chain Ocha Classic will have to pay $1.65 million to 83 employees that have been denied overtime wages in the last four years. Prapai Boonyindee also “kept false pay records in an attempt to hide the wage theft,” the U.S. Department of Labor said in a press release.

The eateries in question include six Ocha Classic locations around L.A. and one Vim Restaurant in Panorama City. The $1.65 million tab accounts for back wages and damages in roughly equal measure, according to Labor, with another $62,167 to be paid “in civil money penalties for the willful nature of Boonyindee’s violations,” the release states.

The payments will be sent to employees in increments, with several having already been sent out, Eduardo Huerta, the Assistant District Director of the DOL’s Wage and Hour Division in Los Angeles told LAMag.

The agreement is a win for the department, but wage theft is still rampant across the country. “It continues to remind the public that we serve and are actively trying to identify, investigate and remedy the situations for low-wage workers,” Huerta said. “There will be justice for these workers.”

Jessica Looman, the Principal Deputy Administrator of the Wage and Hour Division, said in the release that wage theft “is used by unscrupulous restaurant industry employers to increase their bottom lines at the expense of some of our nation’s lowest paid workers. We work tirelessly to recover hard-earned wages owed to workers like these, and employers who disregard workers’ rights accountable for their illegal pay practices and their attempt to mislead our investigators.”

Although wage theft is a crime in California, it rarely brings criminal charges, CalMatters reports. Some argue that with the employer incarcerated, it’s even less likely for employees to get paid. “If they’re behind bars, they’re definitely not paying their workers,” Tia Koonse, legal and policy research manager at the UCLA Labor Center, told CalMatters.

Others say the threat of criminal charges would be more effective in preventing wage theft from occurring in the first place.

In Boonyindee’s case, Huerta said, “I am not aware of any criminal charges being considered because we’re not an agency who can bring criminal charges. We can make referrals towards criminal charges, but any of those pending actions are classified at this time.”

Boonyindee could not be reached for comment.

Although employers agree to pay, Huerta says that it’s not guaranteed. The faster an employee can contact DOL to determine their eligibility the better chance they have of receiving compensation. The problem, however, is that the DOL sends notices to the addresses listed on the employees’ applications, some of which may be several years old. Without updated information, they may never be notified that they are owed money.

“It’s very important that if they feel that they should have been contacted… they need to reach out to our office so that we can get their most current address,” Huerta said. “Nine out of ten times, we’ve been sending a letter to an address that they provided that is old.”

Some employees may have no idea that wages were withheld and some of them, Huerta explained, may only speak Thai, making it more difficult for them to understand the DOL forms even if the workers do receive them. Fortunately, DOL has a hotline where former employees can reach representatives in over 200 languages to check eligibility and find out what, if anything, they are owed at 213-894-6375.

The Ocha case is far from an isolated event, with wage theft plaguing some of California’s most vulnerable workers. From 2017 to 2020, California recovered $221 million in wages, according to CalMatters.

California cited two janitorial service providers contracts by the Cheesecake Factory for $4.57 million in stolen earnings after 559 janitorial workers were underpaid (the chain was also cited); $8.5 million was recovered from six residential care facilities; $12 million was recovered from a subcontractor in Southern California affecting 1000 employees.

Krispy Kreme agreed to pay $1.2 million last November, USA Today reported.

In 2022, the DOL received nearly 4,000 wage theft complaints from food service employees amounting to upwards of $27 million in stolen labor. Over the past decade, employers are believed to have stolen $34-40 million from employees across the nation annually.

The Ocha case comes at a time when the food services industry is still seeing a mass exodus. The DOL reported “near record numbers of job openings and workers in the accommodations and food services industry quitting their jobs.” In 2022, there were close to 11,000 job openings compared to around 7000 in 2018 and 2019, according to data from the U.S. Bureau of Labor Statistics.

“Anytime that there’s an economic opportunity to get better paid, steady employment, workers who can successfully attain that type of employment are going to leave the underpaid, underground, exploitative employment situation that they’re in,” Huerta said. “And move to something a little more legitimate.”

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