Providence restaurant, owner to pay $567K in back wages, damages to 104 employees denied minimum wage, overtime pay

Date of Action: Sept. 23, 2016

Type of Action: Complaint, Consent Judgment and Order

Name of Defendants: Jacky's Galaxie Providence, Inc., doing business as Jacky's Waterplace & Sushi Bar, and Kin Wah Ko. 200 Exchange St., Providence, Rhode Island.

Allegations: An investigation by the Providence Area Office of U.S. Department of Labor's Wage and Hour Division found that the defendants violated the minimum wage, overtime and recordkeeping requirements of the Fair Labor Standards Act. Specifically, the investigation found multiple instances in which defendants:

• Paid servers, bartenders, cooks, bussers and dishwashers at rates less than the federal minimum wage.
• Failed to pay overtime pay to both tipped and non-tipped employees who worked more than 40 hours in a workweek.
• Required servers and bartenders to pay for breakages, customer walkouts and ordering errors out of their tips, reducing their pay to below the federal minimum wage.
• Paid a flat salary to non-exempt employees regardless of the number of hours they worked each week, creating an overtime violation when these employees worked more than 40 hours in a week.
• Took a set percentage of servers' and bartenders' tips to pay other employees.
• Required employees to work without pay at charity events.
• Failed to keep accurate records showing the hours worked each day by employees and the total hours worked during each workweek.

Quote: "These employees were denied their legally required rates of pay. While they will now be compensated, these violations should not have occurred in the first place. Underpaying workers not only harms those workers for whom each week's pay is a vital necessity, it also undercuts those businesses that play by the rules and pay their workers correctly," said Don Epifano, the Wage and Hour Division's assistant district director in Providence. "The resolution of this case sends a clear message — we will continue to use every enforcement tool available to us to ensure workers take home every penny they have rightfully earned."

Resolution: The Labor Department has obtained a consent judgment ordering the defendants to:

• Pay $283,977 in back wages plus an equal amount in liquidated damages to the 104 affected employees.
• Engage a qualified independent consultant with FLSA knowledge and experience to create a system to ensure that all businesses owned by defendant Ko will comply with the FLSA in the future; the consultant will on a biannual basis make available to the Wage and Hour Division, upon its request, reports of any violations and corrective actions taken.
• Hold biannual meetings at all company locations, including Providence, North Providence, Bristol, and Cumberland to inform employees of their FLSA rights.
• Train all managers and assistant managers to comply with the FLSA.
• Amend employee handbooks to include a section on practices prohibited by the FLSA.
• Pay $50,000 in civil money penalties to the Labor Department.

Senior Trial Attorney Susan Salzberg and Wage and Hour Counsel Merle Hyman of the Boston regional office of the Solicitor provided legal services in support of this enforcement action.

Background: As the result of separate investigations by the Wage and Hour Division the defendants previously paid a total of $80,350 in back wages and liquidated damages to 25 employees at the North Providence, Bristol, and Cumberland locations and also paid $13,750 in civil money penalties to the Labor Department for minimum wage and overtime violations.

The FLSA requires that covered, non-exempt workers be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus overtime at one and one-half times their regular wages for hours worked beyond 40 per week. Employers also must maintain accurate time and payroll records. Employers are prohibited from retaliating against workers who exercise their rights under the law.

For more information about federal wage laws administered by the Wage and Hour Division, or to file a complaint, call the agency's toll-free helpline at 866-4US-WAGE (487-9243). All services are free and confidential. Information also is available at http://www.dol.gov/whd/.

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Civil Action Number: 1:16-cv-00525-S-PAS.

Court: U.S. District Court for the District of Rhode Island