In a ruling last month, the owner of San Diego’s Antique Thai Cuisine was ordered to repay $20,000 in “stolen wages and tips” to 6 workers, plus was sentenced to 2 years in jail for grand theft and labor violations. This criminal conviction in a jury trial for felony grand wage theft by false pretenses is a first in California:
How did this happen? The owner hired mostly immigrants and promised hourly wages but usually only paid them tips instead of their wages plus tips. Even then, some of those tips were kept by the owner because she charged the workers $5 each shift for “glass breakage” to offset her operating costs. Kitchen staff often had to work through their rest and meal periods and received as low as $4 per hour. The result:
- 2 Felony counts of grand theft of labor for failing to pay workers as promised;
- 1 Felony count of grand theft of tips;
- 2 Misdemeanor charges for refusing to pay wages when she had the ability to do so;
- 4 Misdemeanor charges for failing to provide itemized wage statements;
- 2 Years in jail; and
- $73,234 in Labor Commissioner citations and other assessments and civil penalties.
How can you avoid this? Make sure all employees receive at least minimum wage. Understand tips are additional income to employees and it belongs solely to the employee. Remember employees have a legal right to rest and meal breaks that are completely free of any work-related duties and, if your employees don’t get those work-free breaks, they should receive penalty pay. Recognize that California throws a lot of things into “the cost of doing business,” including breakage and loss of Company property. Ensure your wage statements (pay stubs) meet the exacting specifications of the law.
Having a business means you’ll have expenses. “Theft” of money due your employees isn’t the path toward a successful business. Let us know if you need help ensuring you are compliant.
Leave a Reply