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$450,000 in citations issued during enforcement of California restaurant industry (9/24)

September 24, 2010
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Investigators from the California Labor Commissioner’s Office issued fines to restaurants during an enforcement sweep for violations of state labor laws addressing workers’ compensation and proper payment of wages, according to a recent press release. The statewide enforcement resulted in 88 citations being issued to 79 restaurants with total penalties of $448,950.

The California Department of Industrial Relations’ Division of Labor Standards Enforcement regularly plans and conducts statewide enforcement sweep to address abuses commonly found in the underground economy, including not providing workers’ compensation coverage protection, not paying the proper minimum and overtime wages and not withholding the required payroll deductions which fund many state programs.

“The underground economy tears at the fabric of small businesses in California by creating unfair competition and putting these businesses at an economic disadvantage,” said Department of Industrial Relations Director John C. Duncan.

The statewide enforcement sweep conducted on September 16 involved 162 restaurant inspections and resulted in the issuance of 88 citations against 79 restaurants. Investigators found 74 businesses that failed to provide workers’ compensation coverage for their employees. Citations issued for no workers’ compensation totaled $377,000 and businesses without coverage were issued stop work orders, which prevents them from operating with employee labor.

“In the past two years my office has conducted the highest number of inspections in low income industries ever on record (over 9,000 each year) to put pressure on illegal businesses operating within the underground economy to come into compliance and provide the required protections entitled to their employees and to preserve a level playing field for compliant employers,” said California Labor Commissioner Angela Bradstreet. “This statewide enforcement action found that a lack of workers’ compensation continues to be an issue in the restaurant industry.”

Investigators found eight cases where the employer did not provide employees a wage deduction statement and five case of improper payment of minimum wage. One business was found to have hired minors without having the required work permits on file.

The Labor Commissioner has also adopted a high priority, proactive approach to ensure that California’s employees are not short-changed by their employers by filing multiple impact litigation lawsuits against egregious violators of the minimum wage and other wage and hour laws. In 2009 the office won judgments and reached settlements totaling more than $17 million in litigation alleging wage violations. Additionally, 228 matters were referred to the local District Attorney’s offices.

For the year 2009, enforcement efforts resulted in 1,382 restaurant inspections/re-inspections and the issuance of 953 citations for violations of various labor laws including not having workers’ compensation, improper payment of wage and no payroll deductions taken. In addition, $1,480,269 in wages was found due to workers.

To request a list of the violations and restaurants cited during the enforcement action, email the Department of Industrial Relations at: Communications@dir.ca.gov.

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