China Sea Restaurants in San Antonio improperly paid tipped employees by improperly not paying minimum wage and overtime pay.  The U.S. Department of Labor's Wage and Hour Division investigated PCXAC LLC and WKHK Investment LLC, owned by Peter Xac. The companies do business as restaurants China Sea #1, China Sea #2 and China Sea #3. The investigation revealed that the employer violated the minimum wage, overtime and record-keeping provisions of the Fair Labor Standards Act. A lawsuit was filed in the U.S. District Court for the Western District of Texas, San Antonio Division. 

The department alleged that the employer used several schemes to deny employees minimum wage and overtime, including using two sets of payroll books. One set that was sent to a bookkeeper showed compliance with the act; however, a second set revealed that the employer was not paying minimum wage for all hours worked and failed to pay proper overtime compensation. Kitchen staff at the three China Sea Restaurant locations routinely worked at least 60 hours per week, but their hours were not recorded. The employers paid kitchen staff a small salary that resulted in minimum wage and overtime violations. Additionally, servers were not paid properly and were owed overtime wages. 

To resolve the federal lawsuit, PCXAC, WKHK Investment and Xac recently signed a consent judgment and agreed to pay $504,577 in back wages, liquidated damages and interest to 82 employees. The corporations and Xac are permanently enjoined from violating the minimum wage, overtime and record-keeping provisions of the FLSA. 

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers are also required to maintain accurate time and payroll records.