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Rangoon Ruby settles wage theft case for $4M

Three hundred employees to receive unpaid wages

The owners of local Burmese restaurant chain Rangoon Ruby have agreed to pay a $4 million settlement to cover unpaid wages for about 300 workers.

The Asian Law Caucus, which represented the employees who brought the case to the California Labor Commissioner's Bureau of Field Enforcement, announced the settlement on Thursday. The labor commissioner ordered the restaurant chain last summer to pay $5 million in back wages and penalties to the state for wage-theft violations.

Max Lee and John Lee of Rangoon Ruby Investment LLC and Burma Ruby Investment LLC operate six restaurants throughout the Bay Area, including Rangoon Ruby and Burma Ruby in downtown Palo Alto.

"We were tired and frustrated because we were working extra hours without any additional pay," Ah Zhang, one of the employees who reached out to the Asian Law Caucus for help in 2017, said in a press release. The San Francisco nonprofit advocates for the legal and civil rights of low-income Asian Pacific American communities.

In an email to the Voice's sister publication, the Palo Alto Weekly, John Lee wrote that they had disputed the claims and that they "regret the tenor of many of the communications about the settlement.

"We are now in full compliance with our wage payment obligations and are committed to maintaining full compliance with all of our obligations in the future," he wrote.

Sai Leng, a longtime Burma Ruby employee, said in the Asian Law Caucus press release that she was not allowed to take time off from work to see the doctor.

"When I took the time off anyway, I wasn't paid and I had to make up the time I missed," she said. The Asian Law Caucus noted that this violates state law, which requires employers to provide their workers with one hour of paid sick leave for every 30 hours worked.

The state labor commission's investigation found that 87 cooks, who were paid a fixed salary at the six restaurants, "typically" logged more than 10 hours of unpaid overtime each week.

Lee said this was the main issue in the case -- whether Rangoon Ruby chefs were entitled to overtime payments or were exempt, which he described as a "very common issue in the restaurant industry."

"Many restaurants pay their chefs’ salaries, just as Rangoon Ruby and Burma Ruby did," Lee wrote.

Just over 200 servers, hosts, dishwashers and bussers at the restaurant chain were also not paid a daily, required extra hour when their employer scheduled them to work split shifts, according to the state labor office. (When minimum-wage employees work a split shift, they are entitled to one hour of minimum wage as a premium.)

According to the Asian Law Caucus, workers were regularly called in to work before their scheduled shifts without overtime pay to handle delivery orders, many of which "came from food delivery apps popular in the Bay Area."

Some staff also relied on their employers for housing, according to the Asian Law Caucus. Lee said they provided chefs "with the option of free housing for as long as they wished to use the housing."

The Rangoon Ruby owners were cited for unpaid minimum wages, overtime, paid sick leave, inaccurate pay statements and related penalties. As the citation hearing started, they decided to settle the case, according to the Asian Law Caucus.

The settlement covers the full amount of unpaid wages owed to the workers as well as penalties.

"We worked very hard with the Labor Commissioner’s office to resolve this matter on positive terms," Lee said. "We support the Labor Commissioner’s efforts to see that all restaurant workers are paid appropriately."

A Daly City restaurant cited by the California Labor Commissioner for wage theft at the same time as Rangoon Ruby last summer is appealing the citations but closed on Jan. 14, according to the San Francisco Chronicle.

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