Xanh Restaurant in Mountain View will be paying more than $90,000 to employees after a U.S. Department of Labor investigation found the company failed to pay overtime wages.
Half of the $93,381 to be paid by the Vietnamese restaurant will compensate workers for overtime, and half will be paid to the workers as damages, said Jose Carnevali, deputy regional director of public affairs, U.S. Department of Labor in San Francisco.
"This settlement puts money back in the hands of employees who rightfully earned it," said Susana Blanco, district director, San Francisco Wage and Hour Division, U.S. Department of Labor. The labor department found the restaurant owes back wages and damages to 18 workers.
Workers were paid straight time rather than time and a half, and the restaurant disguised the straight time payments as bonuses on its payroll, the labor department said in a statement.
"When an employee works beyond 40 hours in a workweek, every hour worked after that needs to be paid at time-and-a-half," Blanco said. The labor department's news release says the Fair Labor Standards Act is the law that applies to overtime wages.
Before the City Council moved to raise the city's minimum wage by $1.30 an hour to $10.30 on Oct. 9, Xanh co-owner Amanda Pham-Huynh told the council she was concerned about having "an adequate flow of income" to pay waitstaff, who earn minimum wage plus tips. Waitstaff make up three-quarters of her 70 employees. She said she has employed as many as 400 to 500 people in the restaurant's eight years of business.
"When you count tips in a two-week time frame I have to pay $60,000" to employees in tips, Pham-Huynh told the council. "That's a lot of money to give and our rent is very high in downtown Mountain View."
The release says the FLSA makes employers liable for paying workers back wages and damages, and both are paid directly to workers.
Xanh Restaurant will also be paying $1,683 in penalties to the federal government.