California Employer Gets Landmark Criminal Conviction For Wage Theft

In a first-of-its-kind criminal conviction in California, a San Diego restaurant owner has been sentenced to two years in jail for promising wages to immigrant workers but paying them only in tips. San Diego County Superior Court also ordered the employer to repay $20,000 in stolen wages and tips to six of the restaurant workers.

California Labor Commissioner Julie A. Su, who led the wage theft investigation, said in a statement, “Our investigation uncovered egregious wage theft and worker abuse.” This included:

  • Collecting a portion of the tips from unpaid workers;
  • Charging the workers $5 a shift for “glass breakage” to offset the employer’s costs; and
  • Paying kitchen staff $4 an hour and forcing them to work during rest and meal breaks.

The restaurant owner was convicted of two felony counts of grand theft of labor for failing to pay workers as promised, one felony count of grand theft of tips and several misdemeanor charges, including four counts for failing to provide itemized wage statements.

Governor Jerry Brown signed California’s Fair Day’s Pay Act last year, which aimed to crack down on wage theft violations such as these by giving the Labor Commissioner increased enforcement rights against employers. The law took effect January 1, 2016. The Act provides that owners, directors, officers or managing agents can be held personally liable as the employer for certain wage and hour violations.

California is not the only state that has taken firm steps to deter wage theft. Effective January 1, 2017, a new Oregon law will require an employer to include additional information on employees’ pay statements to prevent wage theft.

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