Seven months after its owners agreed to pay $1 million to settle federal allegations of wage theft, the Chestnut Hill location of Osaka restaurant has closed.
A representative of the restaurant, contacted at the location in Lansdale, declined to elaborate but acknowledged the shutdown, calling it permanent. Osaka, at 8605 Germantown Ave., opened in 2003, winning plaudits for its sushi — then a fairly esoteric menu item in Chestnut Hill.
The Lansdale location remains open, said the representative, who declined to give his name.
The Philadelphia Department of Revenue affixed a cease-operations notice, dated Sept. 5, to the front door, suggesting that the business was tax-delinquent and that its commercial activity license was revoked. Under state law, details about tax liability are confidential, a city spokeswoman said.
In February, owner Kwang Bum Kim and manager James Kim, the owner’s son, agreed to the $1 million settlement midway through the first day of a trial in federal court, according to a U.S. Labor Department statement. The settlement addressed accusations that they stole tips and failed to pay overtime.
Of the total settlement amount, about $935,000 was earmarked to 201 workers owed back wages and damages for what the Labor Department called "willful violations” of U.S. Fair Labor Standards Act minimum-wage and overtime requirements. The restaurant owners also agreed to pay a $65,000 penalty.
A Labor Department representative did not know the status of Osaka’s repayment plan Friday afternoon.
The Labor Department’s Wage and Hour Division has fined several Philadelphia-area restaurants for wage violations in the last few years, following investigations responding to workers who believed that their pay was shorted.
At Osaka, investigators found “that from at least September 1, 2013, the employers deducted and pocketed 15 percent of customer tips charged on credit cards, well in excess of the 4 percent fee charged by credit card processors,” the division said in a statement.
“The employers also failed to notify tipped employees, including servers, bartenders, bussers, and hosts, that the restaurants were claiming a portion of their customer tips as a credit toward the minimum wage,” according to the Labor Department.
The agency says the restaurants also violated overtime law, "since at least September 1, 2013," adding that "hourly tipped employees received straight time for all hours worked, even when their time records clearly showed them working more than 40 hours.