Bits Blog: How Surveillance Changes Behavior: A Restaurant Workers Case Study

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At an Upscale Beverly Hills Restaurant, Claims of Underpaying Workers

Urasawa, a restaurant on Rodeo Drive in Beverly Hills, serves sushi using ingredients mostly imported from Japan. A typical bill for two easily tops $1,000, and some dishes include 24-karat gold flakes.

BEVERLY HILLS, Calif. — One of the country’s most renowned sushi restaurants, Urasawa, sits in a small alcove above Rodeo Drive here. A typical bill for two people easily tops $1,000. Over an evening that can stretch to three hours, diners are served dishes dotted with caviar and 24-karat gold flakes (for the iron, the chef notes).

Heriberto Zamora, left, is suing for back pay. His lawyer, Kevin Kish, right, said, “We see this happen all the time, across all industries, all parts of the city and all kinds of businesses.”

But workers in the back kitchen are routinely denied overtime pay and forbidden from taking breaks, according to former employees and a California Labor Department investigation. Now, the chef and owner, Hiroyuki Urasawa, is battling state and civil claims that he withheld tens of thousands of dollars in wages and overtime from workers. One former employee who left the restaurant last year said he resorted to urinating in the sink meant for cleaning mops after being told the men’s restroom was for customers only during business hours.

Each night, Mr. Urasawa stands behind a pristine sushi bar serving more than a dozen dishes, each with an elaborate description of the provenance of the ingredients, mostly imported from Japan. With an affable smile, he happily accepts sake from diners, who can spend hundreds of dollars on a bottle.

“It was always about the customers, making sure that they were happy,” said Heriberto Zamora, 26, who worked at the restaurant for more than five years and has filed a civil suit for back pay. “None of the employees were treated very well. We knew people were paying a lot to eat there, but for us it was no different.”

After immigrating from Oaxaca, Mexico, as a teenager, Mr. Zamora found a job at Urasawa through a friend. He worked his way up, starting as a dishwasher and eventually cleaning and preparing the fish and arranging precisely cut vegetables. After a promotion, while he was earning about $9 an hour, Mr. Urasawa forced him to buy his own $700 set of knives — each meant to touch only certain ingredients, Mr. Zamora said. Eventually, he was working nearly 60 hours a week for $11.50 an hour.

One day last June, nine hours into his shift, Mr. Zamora was coughing and asked to go home, complaining of a fever, he said. Mr. Urasawa fired him on the spot, he said.

Mr. Urasawa and his lawyer declined to comment for this article. But he has appealed a ruling issued by the state last month fining him $55,000 for failing to pay overtime and give breaks to Mr. Zamora and three other employees.

Mr. Urasawa is not the first high-end chef to face charges from workers. Mario Batali and his partners ultimately reached a $1.5 million settlement last year with a group of employees at several of his restaurants in New York.

The Urasawa case has become something of a battle cry among the overwhelmingly immigrant work force in hundreds of kitchens here. Labor and immigrant advocates say Mr. Zamora’s experience is typical for thousands of workers in restaurants, regardless of how much customers might be paying to eat there.

The problem is particularly acute in businesses that rely on cash to pay workers, as many restaurants do. A 2009 study by the Labor Center at the University of California, Los Angeles, found that there was an average of $26 million worth of wage violations each week in Los Angeles.

“There are countless examples in which workers are taking home less than they’ve earned,” said Julie Su, the state labor commissioner, who has made cracking down on wage violations a focus of her office. In the case of Urasawa and dozens of other restaurants, investigators wait outside watching workers come and go, comparing what they see to the time records kept on employers’ books. “It’s a perversion of the concept of minimum wage — it goes from being some kind of floor to instead being some kind of ceiling,” Ms. Su said.

Ms. Su has investigated hundreds of wage violation cases this year, using individual complaints as starting points for many of the investigations. In countless cases, she said, owners rely on paying the same rate over 12 hours, though such practices violate labor laws created a century ago in part to ensure that employers hire a sufficient number of people, rather than rely on one worker for many hours.

“We see this happen all the time, across all industries, all parts of the city and all kinds of businesses,” said Kevin Kish, a lawyer for Bet Tzedek, a nonprofit legal group that has taken on Mr. Zamora’s case. “The only thing that is remarkable about this case is that people might expect paying so much means that workers are getting paid fairly.”

After Mr. Zamora was fired, a friend told him to go to the Koreatown Immigrant Workers Alliance, which helps many workers file wage violation complaints. This spring, the organization held a daytime protest in front of Urasawa, which garnered some attention in the local news media.

At an Upscale Beverly Hills Restaurant, Claims of Underpaying Workers

Urasawa, a restaurant on Rodeo Drive in Beverly Hills, serves sushi using ingredients mostly imported from Japan. A typical bill for two easily tops $1,000, and some dishes include 24-karat gold flakes.

BEVERLY HILLS, Calif. — One of the country’s most renowned sushi restaurants, Urasawa, sits in a small alcove above Rodeo Drive here. A typical bill for two people easily tops $1,000. Over an evening that can stretch to three hours, diners are served dishes dotted with caviar and 24-karat gold flakes (for the iron, the chef notes).

Heriberto Zamora, left, is suing for back pay. His lawyer, Kevin Kish, right, said, “We see this happen all the time, across all industries, all parts of the city and all kinds of businesses.”

But workers in the back kitchen are routinely denied overtime pay and forbidden from taking breaks, according to former employees and a California Labor Department investigation. Now, the chef and owner, Hiroyuki Urasawa, is battling state and civil claims that he withheld tens of thousands of dollars in wages and overtime from workers. One former employee who left the restaurant last year said he resorted to urinating in the sink meant for cleaning mops after being told the men’s restroom was for customers only during business hours.

Each night, Mr. Urasawa stands behind a pristine sushi bar serving more than a dozen dishes, each with an elaborate description of the provenance of the ingredients, mostly imported from Japan. With an affable smile, he happily accepts sake from diners, who can spend hundreds of dollars on a bottle.

“It was always about the customers, making sure that they were happy,” said Heriberto Zamora, 26, who worked at the restaurant for more than five years and has filed a civil suit for back pay. “None of the employees were treated very well. We knew people were paying a lot to eat there, but for us it was no different.”

After immigrating from Oaxaca, Mexico, as a teenager, Mr. Zamora found a job at Urasawa through a friend. He worked his way up, starting as a dishwasher and eventually cleaning and preparing the fish and arranging precisely cut vegetables. After a promotion, while he was earning about $9 an hour, Mr. Urasawa forced him to buy his own $700 set of knives — each meant to touch only certain ingredients, Mr. Zamora said. Eventually, he was working nearly 60 hours a week for $11.50 an hour.

One day last June, nine hours into his shift, Mr. Zamora was coughing and asked to go home, complaining of a fever, he said. Mr. Urasawa fired him on the spot, he said.

Mr. Urasawa and his lawyer declined to comment for this article. But he has appealed a ruling issued by the state last month fining him $55,000 for failing to pay overtime and give breaks to Mr. Zamora and three other employees.

Mr. Urasawa is not the first high-end chef to face charges from workers. Mario Batali and his partners ultimately reached a $1.5 million settlement last year with a group of employees at several of his restaurants in New York.

The Urasawa case has become something of a battle cry among the overwhelmingly immigrant work force in hundreds of kitchens here. Labor and immigrant advocates say Mr. Zamora’s experience is typical for thousands of workers in restaurants, regardless of how much customers might be paying to eat there.

The problem is particularly acute in businesses that rely on cash to pay workers, as many restaurants do. A 2009 study by the Labor Center at the University of California, Los Angeles, found that there was an average of $26 million worth of wage violations each week in Los Angeles.

“There are countless examples in which workers are taking home less than they’ve earned,” said Julie Su, the state labor commissioner, who has made cracking down on wage violations a focus of her office. In the case of Urasawa and dozens of other restaurants, investigators wait outside watching workers come and go, comparing what they see to the time records kept on employers’ books. “It’s a perversion of the concept of minimum wage — it goes from being some kind of floor to instead being some kind of ceiling,” Ms. Su said.

Ms. Su has investigated hundreds of wage violation cases this year, using individual complaints as starting points for many of the investigations. In countless cases, she said, owners rely on paying the same rate over 12 hours, though such practices violate labor laws created a century ago in part to ensure that employers hire a sufficient number of people, rather than rely on one worker for many hours.

“We see this happen all the time, across all industries, all parts of the city and all kinds of businesses,” said Kevin Kish, a lawyer for Bet Tzedek, a nonprofit legal group that has taken on Mr. Zamora’s case. “The only thing that is remarkable about this case is that people might expect paying so much means that workers are getting paid fairly.”

After Mr. Zamora was fired, a friend told him to go to the Koreatown Immigrant Workers Alliance, which helps many workers file wage violation complaints. This spring, the organization held a daytime protest in front of Urasawa, which garnered some attention in the local news media.

Restaurant Chains Try to Woo a Younger Generation

For reasons as varied as the economic downturn and a heightened interest in local foods, a significant shift in eating patterns is under way among the millennials, those 18 to 30. Oddly, at least by historic trends, they are eating out less than the baby boomers did at that age. Many in the restaurant business worry that it may be impossible to reverse the decline, which affects 50 million to 60 million young people.

The statistics alone are stark. Restaurant visits among millennials have fallen 16 percent over the last four years, according to research by the NPD Group, a consumer marketing firm, and have failed to pick up as the economy has improved.

“The outlook for the restaurant industry over the next 10 years is dismal,” said Bonnie Riggs, a restaurant industry analyst at NPD.

Over all, sales are expected to grow less than 4 percent in the next decade, a troublesome projection for not only burger chains like McDonald’s but for the newer “fast-casual” dining businesses like Chipotle. McDonald’s stunned investors last month when it announced that its sales in stores open at least a year had fallen 1.2 percent after rising every quarter for almost the last decade.

And so far, restaurant chains have failed to benefit from the steady improvement in the overall economy.

“The informal eating out industry is either flat or declining in many markets around the world,” the chief executive of McDonald’s, Don Thompson, told investors last month.

It is true that restaurant chains like Chipotle, which has a devotion to explaining the origins of its ingredients that brings to mind the “Portlandia” sketch about a chicken dinner, and Subway, where customers plan their own sandwiches and watch them being assembled, are doing better among the millennials than traditional sit-down restaurants and fast-food chains.

But between the proliferation of artisanal food trucks and items like cupcakes made of Valrhona and Callebaut chocolates and topped with a fondant daisy for $2.75 at Georgetown Cupcake, or Fresh Direct’s offering of “heritage” pork from the Flying Pigs Farm in upstate New York, millennials tend to spend their dining dollars sparingly and in a more calculated way.

“This was the group hardest hit by the economic crisis, and there’s a debate right now about whether their purchasing behavior has changed fundamentally as a result,” said Tony Pace, chief marketing officer for Subway. “I think, personally, that there appears to be a structural change. There isn’t a single point — ta-da! — that points to it, but there are a lot of little things that do.”

Vera Chang, 26, who lives in Vermont, is one of those consumers who pays attention to the ingredients on the menu and the origins of the food they favor. She says she rarely eats at chain restaurants, finding places instead through Edible Communities, which gives advice on restaurants, chefs and food, or the local newspaper, which tells her about the chef and the provenance of the foods served.

“I like to know the story about the places I eat,” Ms. Chang said. “I think it’s key to feed one’s heart in addition to one’s stomach when going out.”

She said it was harder for chain restaurants to tell stories about the people behind the food they served and about themselves.

David Palmer, who follows the restaurant industry for UBS, underscored Ms. Chang’s points, noting how particular the younger clientele could be, especially during tough economic times. “The austere crowd has cut back, and pretty significantly,” Mr. Palmer said. “It’s partly that they’re economically challenged by the job market and student loans, but they also want authenticity in ingredients and the ability to customize meals in restaurants.”

According to NPD, it is not that millennials have abandoned fast food altogether: Hamburger chains like McDonald’s, Wendy’s and Burger King get nearly 28 percent of the millennials’ fast-service patronage. They just tend to eat there less often, or they have switched to newer burger places like Shake Shack, Mooyah, In-N-Out Burger and Smashburger.

This article has been revised to reflect the following correction:

Correction: June 7, 2013

An earlier version of this article misstated the surname of the chief executive of McDonald’s. He is Donald Thompson, not Donald Taylor.