Carmichael restaurant Lido Cafe & Bakery was fined more than $167,000 after a federal investigation concluded owners Shawna and Don Rivera withheld overtime pay from employees.
The Riveras paid some employees their normal hourly wage instead of the time-and-a-half rate mandated by law, according to a news release from the Department of Labor's Wage and Hour Division on Thursday. Other salaried cooks were expected to work more than 40 hours per week for no additional pay, another violation of the Fair Labor Standards Act.
"Restaurant workers provide essential services for the public and support their local economies. Paying workers a salary does not relieve employers of their overtime pay obligations when employees work more than 40 hours in a week," Wage and Hour Division assistant district director Patricia Canites said in the release.
Lido ended up having to pay seven workers a combined $81,577 in overtime back wages and another $81,577 in liquidated damages, with the highest payout for one employee totaling $68,598. The Wage and Hour Division also hit Lido with a $4,067 fee for willfully violating the Fair Labor Standards Act between February 2018 and January 2021.
A state audit remains ongoing as well, Shawna Rivera said. Rivera maintains that the complaint was lodged by a disgruntled employee she fired. She said she had paid employees in cash so they could avoid taxes and that her biggest mistake was throwing away old time cards, leaving no trace of payment. However, she also admitted to paying the normal hourly rate for overtime work, not time-and-a-half.
"I'm mentally exhausted from all of this. I just don't know if I have the energy to go through this and run this busy restaurant," Shawna Rivera said. "I'm honestly trying to sell it. … It's not fun anymore."
Lido Cafe & Bakery opened a block away from its current location as Lido Bar & Grill in 1994. Serving breakfast until 3 p.m. closing time, it's known for diner classics like burgers, omelets and sandwiches. A doggie menu serves Fido-friendly items such as scrambled eggs or grilled chicken for $2 to $3.
Shawna, the cafe's main proprietor, was named the 2018 Carmichael Chamber of Commerce Businesswoman of the Year. Starting in July, Lido began closing every Tuesday due to a staffing shortage.