This should get the attention of every entrepreneur and small business owner in California —
Last week, the California Labor Commissioner Julie Su issued citations totaling $481,813 against the owners of Toomie’s Thai Cuisine in Alameda. The citations consisted mostly of civil fines, penalties, and wages owed to 13 employees for minimum wage, overtime, and rest period violations.
In a press release announcing the citations, which is available here, the Labor Commissioner issued a stern warning to businesses that chose to ignore California’s wage and hour laws. She stated, “We want to create a culture of compliance where employers profit by playing by the rules and employers who have concluded that it is cheaper to break the law, that the chances of getting caught are slim, and the costs even if you do get caught are minimal know that those days are over.”
Under California law, the restaurant’s owners are jointly and individually liable for the full $481,813. In other words, it is not a “normal” business debt that can be wiped out by closing and bankrupting the business.
Yesterday, the SF Chronicle’s Inside Scoop blog reported this story here and said, “This incident is the latest in a renewed effort by local enforcers to crack down on labor standards.”
This is why I urge all of my clients — but especially my small business clients — to familiarize themselves with the relevant Wage Orders that govern their businesses. These Wage Orders come directly from the Labor Commissioner’s agency, and they contain some of the most important rules regarding work hours and conditions, wages, overtime pay, meal/rest breaks, and employee records. It is the violation of these Wage Orders that is at the core of so many Labor Commissioner citations. Yet, most small business owners have no idea that these Wage Orders even exist, much less which one(s) could apply to their business.
If you are a small business owner in California, or if you are thinking about starting a new business here, please let this be a lesson. Please inform yourself about California labor laws, and please take compliance seriously. If you are unfamiliar with the California Wage Orders, you can find all of them — for every occupation and industry — here.