Minimum-wage violators in San Francisco say competition is to blame 

Lacrouts-Lyonnaise French Laundry, located in the Mission district, has violated San Francisco’s minimum-wage ordinance four times — a city record — and had to pay workers $177,346 in settlements, according to the Office of Labor Standards and Enforcement.

But owner Kevin Lacrouts said he’s struggled to pay The City’s minimum hourly wage — now $9.92 — because most of his competitors are located in Marin, Oakland and South San Francisco and only have to offer employees $8 an hour — the state’s wage limit.

“It’s unfair when you have big companies that can offer price concessions to get the business and you’re under restrictions that they’re not,” said Lacrouts, whose No. 1 cost is labor.

For labor-intensive businesses such as Lacrouts’ with out-of-town competitors, San Francisco’s rare local minimum-wage law can be devastating.

“There’s only two to three [commercial] laundries left in San Francisco,” he said. “You look at multiple storefronts as you drive around and you go, ‘What business used to be there and why did they leave?’” Lacrouts said he is not “screwing” his workers.

“I’m not a Chinese garment manufacturer living in Hong Kong and screwing his employees. I have employees who have been with me 10 or 15 years. They are dedicated.”

Just as San Francisco companies now grumble that Oakland companies can pay workers less, businesses once complained that competitors in nearby cities had an advantage for not enforcing child labor laws, said Shaw San Liu, lead organizer with the Tenants Workers Center at the Chinese Progressive Association.

The owner of San Tung Chinese Restaurant is another person upset with the wage law.

In 2008, she forked over The City’s largest minimum-wage settlement to date. The five waiters and waitresses who reported her for paying them just $3.64 an hour, pre-tips, won $208,515 in wages going back three years.

The restaurateur, who agreed to speak only under the condition that she be identified simply as “Mrs. Chu,” said she is not a “bad owner.”

“We’re getting hit from both sides,” she said. “You have to consider more how business owner feels, not just the employees. I’m not totally perfect, but at least not that bad owner, otherwise employees wouldn’t last so long.”

Chu said her employees reported her after she tried to stop paying them under the table. Workers refused to report their wages because they wanted to retain access to low-income benefits, she said.

“If I didn’t want to correct this problem, I wouldn’t have to pay anything,” Chu said.

Worker advocates say these kinds of complaints are not new.

“It’s like this game of chicken,” Liu said. “We could all just take the low road and everyone cheats more than the next person, or we could all lift up and say, ‘As a business community, we’re going to agree that it’s not helpful.’”


Breaking the law

The Office of Labor Standards and Enforcement negotiated five separate settlements with two businesses accused of violating San Francisco’s minimum wage law.

Business Date Complaints Wages recovered Workers affected Status
Lacrouts-Lyonnaise French Laundry
April 18, 2006 1 $102,787.00 14 Resolved
Lacrouts-Lyonnaise March 13, 2007 1 $1,035.78 2 Resolved
San Tung Chinese Restaurant Nov. 28, 2007 4 $208,514.70 5 Resolved
Lacrouts-Lyonnaise Dec. 2, 2008 1 $47,163.79 9 Resolved
Lacrouts-Lyonnaise Oct. 26, 2009 1 $26,359.79 9 Resolved

Source: Office of Labor Standards and Enforcement

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