SF restaurant pays back wages, fines workplace Restaurant accused of cheating workers out of thousands of dollars

A man walks past the Dick Lee Pastry restaurant owned by Peter Yu and Ada Chu on Jackson Street in San Francisco, Calif. on Tuesday, Feb. 12, 2013. City Attorney Dennis Herrera has ordered the couple to pay $525,000 in back wages to several employees of the restaurant after forcing them to work long hours at below minimum wage. less A man walks past the Dick Lee Pastry restaurant owned by Peter Yu and Ada Chu on Jackson Street in San Francisco, Calif. on Tuesday, Feb. 12, 2013. City Attorney Dennis Herrera has ordered the couple to pay ... more Photo: Paul Chinn, The Chronicle Photo: Paul Chinn, The Chronicle Image 1 of / 3 Caption Close SF restaurant pays back wages, fines 1 / 3 Back to Gallery

(02-13) 14:54 PST San Francisco -- San Francisco officials have secured $525,000 in back wages and penalties from the owners of a Chinatown restaurant accused of forcing employees to work 11-hour days, six days a week for less than $4 an hour, with at least one doing double duty as a maid at the owners' Telegraph Hill home, court documents show.

The settlement with the owners of Dick Lee Pastry Inc. is the single largest payment the city has received as it tries to protect workers from wage theft, a national problem in which employees, often recent immigrants with limited English, are paid below minimum wage and forced to work long hours without overtime.

By some estimates, California loses $7 billion a year to wage theft in lost tax revenue and economic participation by low-wage workers, state Labor Commissioner Julie Su has said.

San Francisco is among the leaders in cracking down on the practice, collecting $7 million in back pay and interest for workers and $456,000 in penalties and costs since the city's minimum-wage law took effect in 2004, not including cases referred to state investigators or private attorneys.

The enforcements have come against businesses ranging from a car wash that had a city contract, to a pizza joint, as well as restaurants in Chinatown.

"We want to make sure that we're sending a message that we're serious about fighting wage theft and policing unfair competition," said City Attorney Dennis Herrera, whose office sued Dick Lee Pastry and its owners, Peter Yu and Ada Chiu, in July 2011 after the couple allegedly tried to thwart enforcement by the Office of Labor Standards Enforcement, which oversees compliance with the city's labor laws.

"No worker in San Francisco should be forced to work for less than minimum wage," Herrera said. "And it's not just about the workers. You have to make sure you have a level playing field for businesses."

Herrera's office accused Dick Lee Pastry, which operates a restaurant at 716 Jackson St. with an all-you-can-eat buffet, dim sum and pastries, of forcing employees to work between 11 and 14 hours a day, six days a week, for $1,100 a month. That's less than $4 an hour. The city's minimum wage when the case was filed was $9.92 an hour. It's now $10.55 an hour.

One employee, who asked to remain anonymous because she feared being "blacklisted" and unable to work at another business in Chinatown, said she knew nothing about minimum wage or overtime laws when she got the job in 2005, shortly after immigrating from the Taishan region in southeast China.

"I did everything; whatever the boss asked me to do," the woman said through a Cantonese interpreter. City officials say she is owed the most from the settlement - $89,000 from about five years of back wages.

"They only gave me three hours on my paycheck, but I worked 9 (a.m.) to 9 (p.m.) - 11 hours because I got an hour for lunch," she said.

The woman said she quit in 2010 after her bosses wouldn't let her take more than two weeks off to deal with a child care issue involving her young son.

Another employee, who said she bused tables, handed out leaflets to solicit customers and was a housecleaner at the owners' home at night, said through an interpreter that she was fired the day city labor inspectors came to the restaurant.

The city's lawsuit contends Yu and Chiu gave employees copies of fake three-hour work schedules and paid their workers by check for three hours a day at minimum wage, with the remaining amount paid in cash.

Under a settlement filed Jan. 10, Yu and Chiu agreed to pay $525,000 by Feb. 8 or face a $1.5 million judgment and the possible seizure and sale of two properties. Their $525,000 payment last week avoids that.

Chiu declined to comment and referred questions to the couple's attorney, Paul Smoot.

Smoot, reached by phone, said the issue of whether his clients had been properly paying their workers required "a very long and complicated answer."

"This isn't simple," he said. "You're dealing with the government, and there are so many things that never see the light of day."