San Antonio China Sea Restaurants agree to pay more than $500K in back wages, liquidated damages following US Department of Labor lawsuit

SAN ANTONIO — Tipped employees may know the value of a hard-earned dollar better than anyone. Every dollar counts in their profession because tips account for all but a small portion of hourly wages. So, when they receive improper minimum wage and overtime pay, it stings. For 82 waiters and kitchen employees of China Sea Restaurants in San Antonio, this happened.

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 employer used two books to keep track of wages, one for themselves and one for falsifying records. Their illegal actions hurt the workers' families and our community," said Cynthia Watson, regional administrator for the Wage and Hour Division in the Southwest. "This lawsuit demonstrates that the Wage and Hour Division will aggressively pursue all means at our disposal and hold employers accountable for their actions."

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. To learn about how the FLSA applies to tipped employees, visit http://www.dol.gov/whd/regs/compliance/whdfs15.pdf.

For more information about federal wage laws, call the Wage and Hour Division's toll-free helpline at 866-4US-WAGE (487-9243) or its San Antonio District Office at 210-308-4515. Information is also available at http://www.dol.gov/whd.

• Read this news release in Spanish.
• Read this news release in Chinese.