Federal court orders Papa G’s to pay eight employees more than $105,000 in back wages
HUNTLEY — On Aug. 29, the U.S. Department of Labor announced via a press release that a federal court had officially ordered Rick and Steve Tsakalios, the owners and operators of Papa G’s restaurant (10502 Route 47), to pay eight employees more than $105,000 in back wages and damages.
The court order comes despite the employers’ attempt to interfere with the U.S. Department of Labor investigation that found they illegally denied the workers their earned overtime wages.
According to the U.S. Department of Labor, the action comes after the court issued a preliminary injunction in June 2022 to the restaurant as well as to Steve and Rick, to cease their attempts to obstruct an investigation by the department’s Wage and Hour Division.
During its review, the division learned that Steve and Rick told their workers that they did not have to speak with investigators, and questioned those who did, which hindered workers’ cooperation.
“Threatening or intimidating employees to prevent their cooperation with the U.S. Department of Labor investigators is illegal,” stated Chicago’s Regional Solicitor of Labor Christine Heri via a prior press release. “Doing so discourages workers from asserting their rights and interferes with effective enforcement of the Fair Labor Standards Act (FLSA).”
The restaurant’s owners were also found to have provided investigators with falsified payroll records. This was discovered after division investigators audited the employers’ payroll practices from Feb. 5, 2019, to Feb. 4, 2022, when it was determined that Steve and Rick did not pay workers overtime for hours over 40 in a week.
Affected employees were instead either paid straight-time rates or had their hours “banked” to cover time off requests for when they did not work 40 hours in a week.
After having provided falsified payroll records to the division that showed employees rarely worked overtime, investigators were able to obtain a second set of records that showed that employees had worked far more than 40 hours per week.
Additionally, those records demonstrated that Steve and Rick paid employees straight-time rates in cash for overtime hours. A warrant served on the employers’ accountant, Alphameric Accounting of Lincolnwood, recovered more records that confirmed this practice.
On Aug. 3, the department obtained a consent judgment in the U.S. District Court for the Northern District of Illinois which required Papa G’s and its owners to abide by various court orders including having to pay $52,904 in back wages and an equal amount of liquidated damages to the affected employees.
The Tsakalios are also permanently forbidden from preventing workers’ cooperation with a federal investigation.
In addition to the back wages and liquidated damages that must be paid to affected employees, Steve and Rick must pay $5,992 in civil money penalties for their willful violations of the Fair Labor Standards Act.
The restaurant has also been instructed to hire an independent accountant to audit payroll records for three years to ensure compliance and to provide all employees with information about federal wage laws and their rights.
“A federal court has upheld the findings of our investigation that Papa G’s denied eight workers the overtime wages they earned legally and then obstructed a federal investigation,” said Chicago’s Wage and Hour Division District Director Tom Gauza. “The court’s action will also lead to the recovery of more than $105,000 in back wages and damages for eight restaurant employees who worked long hours to put food on their own tables.”
The Huntley-based Papa G’s restaurant has offered breakfast, lunch, and dinner to area customers for 25 years.
