City Slaps Airline Caterer With $335K Fine for Minimum Wage Violation

Meanwhile, the minimum wage is hitting $15 an hour for some employees in Seattle.

The City of Seattle has fined an airline catering firm $335,033 for violating the minimum wage law at its West Seattle location.

From a press release that just hit our inbox:

“The Seattle Office of Labor Standards (OLS) found that LSG Sky Chefs violated Seattle’s Minimum Wage Ordinance, and has ordered the company to pay $210,213 in lost wages plus interest to 156 employees and $109,320 in liquidated damages. OLS also levied $15,500 in penalties for first time violations and failure to cooperate with its investigation. The total amount assessed was $335,033.”

The city in its press release suggests that Sky Chefs, a subsidiary of Lufthansa, purposely made the investigation into the wage-law violations difficult:

“The investigation was … delayed when Sky Chefs released weekly payroll records for 165 employees to OLS investigators in a non-alphabetized stack of 14,000 individual pieces of paper, resulting in investigators’ spending 201 hours to calculate individual employees’ wages, shift differentials and overtime payments over a period of 4 months.”

OLS spokesperson Elliott Bronstein says by email that this is the biggest fine ever issued under the minimum wage law.

The city, possibly addressing a critical piece in The Stranger last May questioning why the investigation in to Sky Chefs was taking so long, took (labor?) pains to detail all the delays in the case.

“The original complaint alleged that Sky Chefs failed to increase wages for its Seattle-based employees once the City’s new Minimum Wage Ordinance went into effect on April 1, 2015. OLS ordered the company to respond on April 23, 2015, but Sky Chefs chose to challenge the wage claim by arguing that it was exempt from Seattle’s Minimum Wage Ordinance under a provision of the federal Railway Labor Act. A delay in the investigation resulted when the assigned case investigator went on maternity leave and OLS transferred the case to another investigator; a delay of 2-3 months occurred when Sky Chefs changed its legal counsel.”

In a written statement to Seattle Weekly, Sky Chefs says it got a bum rap and that it was caught in a Catch-22 of labor laws:

“LSG Sky Chefs strongly disagrees with the administrative findings of the City of Seattle regarding local minimum wage rules. When the minimum wage ordinance became effective on April 1, 2015, Sky Chefs was engaged in collective bargaining with the union that represents its Seattle-based employees. Federal law — in particular, the Railway Labor Act — prohibited Sky Chefs from changing wages while bargaining was ongoing. The bargaining resulted in new wage rates that, in Sky Chefs’ view, fully comply with the local ordinance. In its findings, the City ignored these points. Sky Chefs plans to vigorously contest the findings.”

In other minimum wage news, Mayor Ed Murray tomorrow will hold an press conference at the Central Co-Op to mark the increase of the Seattle minimum wage to $15 an hour for the largest employers in the city later this month. This marks the first time any employers will be required to pay the much ballyhooed $15 wage.

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