Employer Found in Contempt of Court for Failure to Pay Back Wages

Monday, May 7, 2012

China Star of Wichita Inc. and its owners, Hank Luc and Xin G. Chen, have been found to be in contempt of court for violating a consent judgment approved on May 21, 2008, under which they were required to comply with the provisions of the Fair Labor Standards Act and to pay a total of $223,394 in back wages and liquated damages to 11 employees.

An investigation conducted by the U.S. Department of Labor's Wage and Hour Division found that the buffet restaurant's cooks, dishwashers and busboys were paid a flat rate in cash, without regard to overtime compensation for hours worked over 40 in a week. The employees often were paid less than the federal minimum wage, receiving an average hourly rate of $4.90. The Labor Department successfully argued that these violations placed the defendants in contempt of the 2008 judgment, which had resolved a previous suit brought by the department to address similar violations and also had prohibited future violations of the FLSA.

The Wage and Hour Division has investigated the restaurant three times and found during all investigations that the employer violated the FLSA's pay and record-keeping requirements, and coerced workers to sign falsified records.

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular rates for hours worked beyond 40 per week. In accordance with the FLSA, an employer of a tipped employee is required to pay no less than $2.13 an hour in direct wages provided that amount plus the tips received equals at least the federal minimum wage of $7.25 an hour. If an employee's tips combined with the employer's direct wages do not equal the minimum wage, the employer must make up the difference. Employers also are required to provide employees notice of the FLSA tip credit provisions, to maintain accurate time and payroll records, and to comply with the restrictions applying to workers under age 18.

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