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Don’t let fines, tool costs undercut base wage

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in Compensation and Benefits,Human Resources

Watch out if you ever fine employees, force them to pay others to perform work they can’t finish or make them provide their own equipment. Those expenses may cause them to earn less than the minimum wage.

Recent case: Yu Ke and more than 20 other New York City restaurant delivery workers sued their employer, a chain of Vietnamese restaurants, for unpaid minimum wages and overtime. The men had been hired off the street soon after they arrived from China.

The men were scheduled to work from the time the restaurants opened until closing, with no official breaks. During the workday, they were expected to prepare delivery packets during slow times. If they didn’t deliver orders fast enough to suit the owners, they were fined. Plus, they had to pay kitchen staff out of their own pockets if they needed help preparing packets. They had to buy and maintain the bicycles and motorbikes they used to deliver orders throughout the city.

None received a formal wage, and the restaurant chain did not keep track of their hours.

The court said they were due at least minimum wage—and ruled that the fines, payments and bike costs had to be subtracted from their earnings in order to determine the hourly rate they had been paid.

The court then used the employees’ estimates of hours worked to calculate how much they should have been paid and added to that tab the transportation costs, fines and kitchen help payments.

For some of the men, the total amount due was $250,000 or more. (Ke, et al., v. Saigon Grill, et al., No. 07-Civ-2329, SD NY, 2008)

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