HILO — A popular Hilo restaurant will pay more than $53,000 in unpaid wages and damages to employees after being found in violation of the federal Fair Labor Standards Act.
The U.S. Department of Labor recently concluded an investigation determining that Hawaiian Style Cafe, which also has a location in Waimea, had not paid employees legally required overtime pay rates.
A DOL release issued Wednesday said overtime hours at both restaurant locations were paid in cash at regular rates, as opposed to the federally mandated time-and-a-half rate for overtime.
“This is our first time visiting the employer,” said Terence Trotter, director of the DOL’s Honolulu district office. “We don’t disclose the reason for an investigation, but many are initiated by complaints.”
The investigation began in June last year, with officials reviewing pay records from June 26, 2013, through June 25, 2015.
Unpaid overtime wages for the Hilo location were $21,798. Hawaiian Style Cafe also will pay an equal amount to employees in liquidated damages, for a total of $43,596 to be paid to 41 employees. At the Waimea location, $10,400 ($5,200 plus an equal amount of liquidated damages) will be paid to four employees.
“We’ve seen this kind of violation before,” Trotter said.
Sometimes, he said, employers make overtime pay arrangements with workers, but “you can’t make arrangements with employees that don’t meet the federal minimum.”
In an email, department spokesman Jose Carnevali said Hawaiian Style Cafe agreed to pay the back wages last month and already had done so.
The money is paid to the DOL, Trotter said, and then is distributed to claimants by the department’s back wage disbursement team. That process is ongoing, he said.
“Although we do recover wages on behalf of workers, we’re primarily a compliance agency, not a collection agency,” he said. “It’s important to us to work with an employer.”
Employers also submit compliance action plans to the department; one is on file for Hawaiian Style Cafe.
Hawaiian Style Cafe owners Guy and Gina Kaoo could not be reached for comment by press time.
The Fair Labor Standards Act provides baseline standards for the employee-employer relationship. In addition to overtime pay, it lays out criteria for record-keeping, minimum wage payments and child labor protections.
Both Hawaiian Style Cafe locations have dedicated customer bases of locals and tourists alike, drawn to the sizable portions of local favorites. The Waimea location is ranked first of 67 restaurants in town, according to user ratings on TripAdvisor.
Hawaiian Style Cafe first opened in 1993 in Waimea. Guy and Gina Kaoo took on ownership in 2005, according to the restaurant’s website. They opened the Hilo location in December 2012.