The owners of Triad pizzeria chain El Cugino Forno Pizzeria were ordered to pay 63 employees a combined $276,048 in back wages as part of a US Labor Department wage and hour investigation disclosed Wednesday.
Affected are Cugino Forno Clemmons LLC, Cugino Forno LLC in Greensboro and Cugino Forno WS LLC in Winston-Salem.
One of the chain’s owners, Joseph Ozbey, said in a Friday interview with the Winston-Salem Journal that the issue involved a “miscalculation of wages” that was corrected months ago after they were notified by US Labor officials.
“We recognized the miscalculation when they (US Labor) came to us and asked us for documentation,” Ozbey said.
“They trained us and told us this is how it is supposed to be, and it is how we have been doing it from that day.
“It’s been taken care of. We went to all employees, including past employees, and paid them.”
The wood-fired Neapolitan pizzeria restaurant locations are at 6315 Clemmons Point Drive, 486 N. Patterson Ave. in Winston-Salem and 1160 Revolution Mill Drive in Greensboro.
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Investigators determined the chain paid as little as $1.19 per hour as a cash wage to workers.
The minimum cash wage for tipped employees in North Carolina is $2.13 an hour — the same as required under the federal Fair Labor Standards Act. North Carolina’s minimum wage of $7.25 has been the same as the national minimum wage since 2009.
US Labor investigators said that by the chain paying below the minimum wage for tipped employees, it “forced them to rely almost entirely on tips for their income.”
The investigation determined the restaurants collected customer tips left for some workers and used them to pay other employees’ wages, leading to additional violations of the Fair Labor Standards Act’s minimum wage provisions.
Investigators also found the employer failed to pay the required overtime rate when applicable.
Ozbey said that when US Labor officials presented the owners with the amount of back wages that was owed, “we accepted it, we didn’t fight back because we knew the money was going to our employees.”
Ozbey said providing the back wages “put us in a real difficult situation financially.”
Ozbey said the assessment that the chain was paying as low as $1.19 an hour in cash did not represent a full picture of the issue.
“Instead of telling (employees) they were going to be paid $2.13 per hour and tips, we promised them $10” an hour, Ozbey said.
“We used the tips that were collected and paid them, and on top of that we paid from the company” if tips weren’t enough to reach $10 an hour.
“That’s where the miscalculation came.”
Ozbey said part of the wage dispute comes from how the restaurants operate, with counter service rather than table service.
“No one, no matter their level of experience, has received less than $10 an hour,” Ozbey said.
“Most of these employees are still working for us. If they felt they had been mistreated, they would have left, especially since everywhere you go, every restaurant is hiring.
“We did not lay off a single person due to the (COVID-19) pandemic.”
Ozbey and cousins Yilmaz Guver and Adam Adksoy opened the Greensboro location in 2017, Winston-Salem in March 2019 and Clemmons in October.
The chain recently opened a Durham restaurant that wasn’t listed in the department’s news release.
“Restaurant employees work hard, often for low wages, and many depend on the tips they receive from customers for good service to makes ends meet,” Richard Blaylock, Raleigh district director for the US Labor Wage and Hour Division, said in a statement.
“Employers are obligated to pay their workers all their legally earned wages.
“Those who do not respect their workers’ rights will likely struggle to retain and recruit the people they need to remain competitive, as workers look for opportunities with employers that do.”
In fiscal year 2021, the Wage and Hour Division recovered more than $34.7 million for more than 29,000 workers in the food service industry.