Employer Gets Jail Time for Wage Theft As the DIR Teams Up With District Attorneys

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08/23/2017

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Employer Gets Jail Time for Wage Theft as the DIR Teams Up With District Attorneys

 By: Jacquelyn E. Larson

According to a Department of Industrial Relations’ (“DIR”) press release, Zihan Zhang, owner of Antique Thai Cuisine in San Diego, was sentenced to two years of jail time for “grand theft” and labor violations. According to the DIR, Zhang promised wages to workers but then often paid only in tips. Some of the kitchen staff were paid as little as $4 an hour, and were forced to work during breaks and meal periods. The owner further collected a portion of the tips from the workers, and charged them $5 a shift for “glass breakage” to offset the employer’s operating costs.

According to the press release, this all came to light in 2014 after some of the workers filed wage claims with the Labor Commissioner’s Office. The Labor Commissioner’s Office cited Antique Thai $36,617 in July of 2014, including assessments of $14,567 for rest and meal period premiums, wages, overtime and liquidated damages, and civil penalties of $22,050 for failure to provide itemized wage statements as well as overtime, minimum wage, rest and meal period requirements.

After issuing the citations, the Labor Commission then worked with the San Diego District attorney to bring criminal charges against Zhang, who was eventually convicted by a jury of “grand theft of labor” and “grand theft of tips.”

This means of prosecuting employers is a leap from how Labor Code violations have previously been enforced. The Labor Code does make some employment practices a crime – for example, it is a misdemeanor to willfully disobey court orders regarding paying wages, and a felony for violations that result in death or serious injury. However, charging an employer with “wage theft” as a felony under the Penal Code, up to now, has rarely been done. According to the DIR, this is the first time that an employer has been charged with “grand theft by false pretenses.”

COUNSEL TO MANAGEMENT:

The DIR’s press release specified that this conviction was for “egregious wage abuses.” It also stated that the owner “targeted immigrant workers.” While the DIR is trying to paint it as though this sort of punishment could not happen to just any employer, our office will be keeping a close eye on the types of prosecutions of employers that follow. Given broad prosecutorial discretion, such cases will help to inform what constitutes “egregious” offenses worth prosecuting and under which circumstances such alleged abuses will be prosecuted. If you have questions regarding your compliance with the Labor Code and possible penalties, please contact the experts at the Saqui Law Group.

 

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