A federal probe of Koreatown-area restaurants uncovered rampant violations of minimum wage and overtime laws, the U.S. Labor Department announced Friday.
In a sweep of 43 randomly picked restaurants, investigators found that 200 workers were underpaid by $250,000. All but two of the restaurants had violated the labor laws, said regional spokesman Tino Serrano of the U.S. Labor Department.
The agency’s wage and hour division checked the restaurants in the area bounded by Hoover Street and Crenshaw Boulevard and Pico Boulevard and Melrose Avenue between March and May. The sweeps came after workers complained that they were routinely asked to sign agreements that they were independent contractors and therefore exempt from state and federal laws, officials said.
The area includes Koreatown, where the complaints originated, and most of the restaurants involved in the sweep are located there.
Federal laws require workers to be paid at least 1 1/2 their regular hourly pay for working in excess of 40 hours a week, and the federal minimum wage of $5.15 an hour. California minimum wage is $5.75 an hour.
“Restaurant workers are some of the nation’s lowest paid and most vulnerable workers,” Labor Secretary Alexis M. Herman said in a statement. “It is especially disturbing that the violations continued even after the department explained the application of federal labor laws to the restaurants’ owners.”
State and federal labor officials held seminars earlier this year to explain wage and overtime laws to the Korean Restaurant Owners Assn.
Labor officials, citing department rules, declined to release the names of restaurants and workers who won the back wages.
“This is good news for restaurant workers in Koreatown,” said Roy Hong, executive director of Korean Immigrant Workers Advocates, which has waged a long battle with restaurant owners over wages and working conditions.
“The Department of Labor investigation clearly shows the seriousness of the problem in the restaurant industry in Koreatown,” Hong said. “Employers need to take a self- reflective look at this and really try and improve their employment practices toward workers. And workers need to take steps to exercise their rights under the law.”
Dong Ho Chon, president of the Korean Restaurant Owners Assn., blasted Hong’s group for “agitating employees by digging up old stories.”
“Since we had seminars with federal and state labor officials, everybody is abiding by the rules,” Chon said.
“We are a first-generation immigrant community. Many restaurant owners practice the Korean way of paying monthly salaries, not hourly wages,” he said. “They didn’t keep time cards and keep overtime records because they were doing business like they do back home.”
But all that has changed now, Chon said. “Everyone is playing by the rules.”
Chuck Striegel, deputy district director in the Los Angeles office of the wage and hour division, said the violations were worse than in the garment industry.
Striegel, a 30-year veteran of the office, said a recent investigation of Santa Monica restaurants found a 50% violation rate.
He cited a variety of reasons for the high rate, including lack of information from accountants the restaurant owners consult.