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October 12, 2022

Mugen Inc. also allowed 15-year-old employees to work longer than the law allows

GOLDSBORO, NC – A federal investigation has recovered $157,287 in back wages for 65 workers after it was found that payroll practices at a Goldsboro restaurant denied workers full pay by withholding portions of their earned tips.

The US Department of Labor’s Wage and Hour Division found that Mugen Inc. – which does business as Jay’s Kitchen – withheld a percentage of its employees’ tips, in violation of the Fair Labor Standards Act’s minimum wage. This deprived the employer of the right to claim tips and owed the workers the difference between the cash wages paid and the federal minimum wage. Investigators also found that Mugen Inc. failed to keep accurate records of hours worked, failed to provide dates of birth for employees under the age of 19, and preserved addresses for several employees, all violations of the FLSA records.

Investigators also found that Mugen Inc. allowed three 15-year-old employees to work after hours while school was in session, in violation of federal child labor laws. Employees worked more than 3 hours during the school day, more than 18 hours during the school week and after 7 pm. while school was in session. The department assessed a fine of $1,915 to address the violation.

“Tipped workers in the food service industry rely on their hard-earned tips to make ends meet. Tips are the property of workers and, under no circumstances, employers may withhold any portion of their employees’ tips,” explained Wage and Hour Director Richard Blaylock in Raleigh, North Carolina.

“Our investigation also revealed that Mugen Inc. employed underage workers illegally. The Wage and Hour Division assessed more than $1 million in fines and found child labor violations in nearly 200 investigations in the food service industry over the past two fiscal years,” Blaylock added. “We are determined to ensure that the welfare and safety of young workers is not compromised and that employers understand that there can be costly consequences for not complying with federal child labor laws.”

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. In 2022, the Bureau of Labor Statistics reports a near-record number of job openings and workers in the lodging and food service sectors leaving their jobs.

“Employers who do not respect their workers’ rights are likely to struggle to retain and hire the people they need to remain competitive, as workers seek opportunities from employers who do,” Blaylock said.

In addition to Jay’s Kitchen, Mugen Inc. also owns and operates Jay’s Sushi & Burger Bar in Goldsboro, Ninja Hibachi Express in Goldsboro and Greenville, Ninja Grill in Goldsboro, Ninja Hibachi & Burger in Mount Olive, and Jay’s 108 in Kinston.

View the department’s statistics on child labor investigations across the US and the Southeast.

For more information about the FLSA and other laws enforced by the department, contact the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Workers can call the Wage and Hour Division confidentially with questions—regardless of their immigration status—and the department can speak to callers in more than 200 languages.

Learn more about the Wage and Hour Department, including resources available online where employers, parents, teachers, and minor workers can get information about protecting young workers under the department’s youth policies! website, as well as learning about seven best child labor practices for employers.