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Secretary of Labor Thomas E. Perez
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News Release

WHD News Release: [01/24/2012]
Contact Name: Elizabeth Todd or Juan Rodriguez
Phone Number: (972) 850-4710 or x4709
Release Number: 11-1810-DAL

US Labor Department sues Chinese buffet in Austin, Texas, and owner to recover back wages and damages for 75 employees

AUSTIN, Texas — The U.S. Department of Labor has filed a lawsuit against Chi Buffet LLC, doing business as Chi Chinese Buffet in Austin, and owner Susan Chan for alleged violations of the federal Fair Labor Standards Act affecting 75 current and former kitchen, busing and wait staff employees. The suit was filed following an investigation by the department's Wage and Hour Division that found the defendants had violated the FLSA's minimum wage, overtime and record-keeping requirements.

"The Labor Department is committed to protecting the rights of low-wage and vulnerable workers, including those in the restaurant industry," said Cynthia Watson, regional administrator for the Wage and Hour Division in the Southwest. "Vulnerable workers are those who, for a variety of reasons, are reluctant to come forward and complain when they are subjected to violations, especially in tough economic times. Filing this lawsuit underscores the department's commitment to using all enforcement tools available, including litigation, to recover workers' wages and ensure a level playing field for employers who abide by the rules."

The complaint was filed in the U.S. District Court for the Western District of Texas, Austin Division, after the division's San Antonio District Office determined that unlawful deductions had been taken from employees' tips, resulting in their pay falling below the federal minimum wage; kitchen employees had been paid "straight time" rather than time and one-half for hours worked over 40 in a week; and required record keeping had not been maintained.

The complaint alleges that Chi Chinese Buffet and Chan willfully failed to pay proper minimum and overtime wages, and seeks back wages for a three-year period plus an equal amount in liquidated damages, as well as injunctive relief. The FLSA provides that employers who violate the law are liable to employees for back wages and an equal amount in liquidated damages. Liquidated damages are paid directly to the affected employees.

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular rates of pay, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. In accordance with the FLSA, an employer of a tipped employee is required to pay no less than $2.13 an hour in direct wages provided that amount plus the tips received equals at least the federal minimum wage of $7.25 an hour. If an employee's tips combined with the employer's direct wages do not equal the minimum wage, the employer must make up the difference. Employers are also required to provide employees notice of the FLSA tip credit provisions and to maintain accurate time and payroll records.

For more information about the FLSA and other federal wage laws, call the Wage and Hour Division's
toll-free helpline at 866-4US-WAGE (487-9243), or its San Antonio office at 210-308-4515. Information also is available on the Internet at http://www.dol.gov/whd/.