---

Wage and hour labor law compliance isn't just about following rules—it's about protecting your business from costly litigation. Fei Da Bakery’s history serves as a cautionary tale for employers, highlighting how non-compliance can lead to significant financial and reputational damage.

The Cost of Wage Theft: Fei Da Bakery’s $940,000 Settlement

In 2022, Fei Da Bakery, a popular chain with over 14 stores, faced a class-action lawsuit involving 749 former and current employees. The lawsuit alleged widespread wage theft, including:

• Rounding off work hours to underpay employees.
• Failing to pay overtime as required by law.
• Forcing employees to work during their breaks, violating labor protections.

The case was settled for $940,000, compensating employees who worked between August 2015 and June 2022. While this settlement provided relief to employees, it also illustrated the severe consequences of ignoring wage and hour regulations.

A Pattern of Non-Compliance

Unfortunately, this wasn't Fei Da Bakery's first encounter with labor law violations:

• 2012: The U.S. Department of Labor ordered the bakery to pay over $50,000 in compensation and fines for failing to pay minimum wage and overtime to 105 employees.
• 2015: Another lawsuit alleged that the bakery illegally deducted meal and uniform expenses from employees' paychecks without providing corresponding services. This case is still ongoing.

These repeated violations show how non-compliance can escalate, creating a snowball effect of lawsuits and financial penalties.

Courts Put the Burden of Proof on Employers

In wage and hour disputes, courts often place the burden of proof on the employer. This means that businesses must provide detailed and accurate records of employee hours, wages, and compliance with labor laws. If these records are incomplete or inaccurate, courts are likely to side with employees. For Fei Da Bakery, failing to maintain accurate records likely played a role in the lawsuits' outcomes. Employers who don't proactively ensure compliance are at risk of facing:

• Hefty settlements or judgments: As seen in the $940,000 settlement.
• Damage to reputation: Public lawsuits can erode trust and harm the brand.
• Ongoing legal costs: Legal battles can last years, draining resources.

Compliance is Cheaper Than Litigation

Fei Da Bakery’s example underscores the importance of investing in compliance measures. Using modern tools, such as labor law compliance software, can help businesses stay on track. Features like timekeeping systems with signature confirmations, real-time compliance checks, and detailed recordkeeping can protect businesses from similar lawsuits.

Takeaway for Employers

Non-compliance with wage and hour laws isn't just risky—it’s financially unsustainable. As Fei Da Bakery’s experience demonstrates, the costs of lawsuits and settlements far outweigh the expenses of compliance. Employers must prioritize accurate recordkeeping, fair pay practices, and adherence to labor laws to avoid becoming the next cautionary tale in the fight against wage theft.

By learning from cases like this, businesses can safeguard their operations and build a reputation as fair and responsible employers.