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Home / San Diego Deli Overtime Case: Why a $100 Daily Rate Led to $500,256

San Diego Deli Overtime Case: Why a $100 Daily Rate Led to $500,256

A recent San Diego investigation shows how a simple daily-pay system can create large wage liability. Six employees received $100 per day while often working 11-hour shifts and averaging 55 hours per week.

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San Diego Deli Overtime Case: Why a 0 Daily Rate Led to 0,256

Quick answer: A flat $100 daily payment did not eliminate minimum-wage or overtime duties. Covered workers must receive the local minimum wage and overtime after 40 hours.

The July 2026 recovery

The Department of Labor recovered $500,256 in back wages for six workers at A Chau Sandwich. Investigators found that employees were paid $100 per day despite long schedules.

The Department stated that each affected worker received approximately $83,000.

How daily pay is tested

Weekly daily-rate earnings are divided by all hours worked to determine the regular rate. Minimum-wage compliance must be tested, and an additional overtime premium is generally due for hours over 40.

Simplified example

Why liability grows

Small weekly shortages accumulate over several years. Liquidated damages and multiple affected employees can substantially increase the total.

Restaurant warning signs

Frequently Asked Questions

Can deli employees be paid by the day?

Yes, but all wage and hour rules still apply.

Does the day rate include overtime?

Not automatically.

How is the regular rate found?

Weekly includable pay is divided by total hours.

Why was the recovery so large?

Long-term underpayment and damages accumulated.

Must cash-paid workers have records?

Yes.

Official Sources

This article is for general educational purposes and is not legal, tax, accounting, payroll, or employment advice. Rules can change and may differ by state, locality, occupation, employer, and employee circumstances.

Reviewed for accuracy by the OvertimePayUSA editorial team using official labor sources such as the U.S. Department of Labor and state agencies.
Official Sources

This calculator is for educational purposes only. Consult your employer or a labor attorney for advice specific to your situation.

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Frequently Asked Questions

Can my employer require me to work overtime?
Yes. Employers can require overtime work. However, they must pay the required overtime premium (1.5x or higher per state law) for hours over the threshold. Refusing to work overtime may result in termination, but employers cannot refuse to pay overtime premiums that are legally owed.
What should I do if I think I'm owed unpaid overtime?
Document everything: save pay stubs, time records, emails, and any communications about hours worked. Calculate what you believe is owed. Contact your employer in writing first. If they don't respond satisfactorily, file a complaint with your state Department of Labor or the U.S. Department of Labor Wage and Hour Division. Consider consulting an employment attorney for large amounts.
Is my salaried position automatically exempt from overtime?
No. Many salaried positions still qualify for overtime pay. Exemption requires: (1) earning above the minimum threshold (~$35,500 federally, varies by state), and (2) spending more than 50% of time in exempt duties (executive, professional, administrative). If unsure, file a wage claim or consult an employment attorney.
Can I get overtime pay if I work multiple jobs?
Federal overtime laws (FLSA) typically count only hours for a single employer. However, some states have more generous rules. Hours worked for different employers at the same time usually don't combine for overtime purposes unless you're an independent contractor. Check your state's Department of Labor for specific rules.
What's the statute of limitations for claiming unpaid overtime?
Federally, you have 2-3 years to file a lawsuit for unpaid wages (3 years for willful violations). State laws vary: California allows 3-4 years, New York allows 6 years. For administrative complaints, the timeframe is often shorter (1-2 years). Act quickly if you believe you're owed wages.
Do I have to be paid for meal breaks?
If you work during a meal break or cannot take a true break away from your workstation, that time must be paid. If you take an actual, uninterrupted break (usually 20+ minutes), it can be unpaid. Rules vary by state—check your state's Department of Labor for specifics.
Can deli employees be paid by the day?
Yes, but all wage and hour rules still apply.
How is the regular rate found?
Weekly includable pay is divided by total hours.
Why was the recovery so large?
Long-term underpayment and damages accumulated.
⚖️ Statutory Legal Authority: Overtime pay calculations strictly follow the Fair Labor Standards Act (FLSA), 29 U.S.C. § 207 and U.S. Department of Labor (WHD) Regulations 29 C.F.R. Part 778. State daily overtime rules comply with California Labor Code § 510, Colorado COMPS Order #38, and Alaska Stat. § 23.10.060.