Xaga Sushi, the Asian Fusion restaurant at 217 Merrick Road in Merrick, and its sister restaurant of the same name at 1330 Broadway in Hewlett, paid employees less than minimum wage and no overtime, according to the U.S. Department of Labor. The restaurants also illegally required the wait staff to pool its tips with the kitchen staff, and failed to maintain required payroll records, the DOL said.
The government ordered the restaurants and their owner, Mei Yu Zhang, to pay more than $288,000 in back wages, damages and civil penalties.
An investigation by the DOL’s Wage and Hour Division revealed that 70 workers at the two Xaga Sushi restaurants were not paid in compliance with the Fair Labor Standards Act. Xaga employees, who frequently worked between 42 and 50 hours per week, received a flat monthly salary — in cash — without overtime pay, according to a DOL press release.
“These at-risk workers will now receive the wages and tips to which they are entitled under the FLSA,” Irv Miljoner, the Wage and Hour Division’s Long Island district director, said in the release. “Not paying legally required minimum wage and overtime deprives these workers and their families of money for daily living expenses. It also undercuts those employers who choose to obey the law and pay their workers properly.”
Zhang and her restaurants, which are incorporated as Xaga Sushi Restaurant Inc. in Merrick and Grand Saga Restaurant Inc. in Hewlett, agreed to a consent judgment that the DOL filed in federal court in Central Islip. The judgment requires Zhang and her two companies to pay $261,887 in back wages and liquidated damages and $26,322 in civil penalties, as well as to reform their practices in line with the FLSA.
Grand Saga Restaurant Inc. was incorporated in 2008, and Xaga Sushi Restaurant Inc. in 2010, according to the New York Department of State. Samantha Chan, Zhang’s Flushing-based accountant, said that Zhang is a first-time business owner, and that her labor law violations were unintentional mistakes caused by ignorance of the law. Chan said Zhang hired her after the DOL audited the two restaurants last year, and that both restaurants have complied with labor laws since Dec. 15, 2012.