When John Wang worked at Z & Y Restaurant, one of the most famous dining destinations in San Francisco's Chinatown, he says he didn't get overtime pay, the restaurant routinely took his tips and breaks weren't possible.

“I can't even use my fingers to count the number of times I used the bathroom at Z & Y,” Wang said. “It was nonstop work.”

In 2018, he and a group of fellow workers decided to file a claim with the state for lost wages and to pursue a better work environment. Now, that fight is over: Z & Y has agreed to pay 22 workers $1.61 million in a hefty wage theft settlement, including nearly $600,000 in tips that the workers say the restaurant withheld from them. The original complaint also alleged failure to pay minimum wage, overtime, sick leave and split-shift premiums from 2016 to 2019.

Z & Y denied any wrongdoing in the settlement. Faced with multiple citations from the Labor Commissioner's Office and a separate lawsuit regarding tips, Z & Y owners Jun Yuan Zhang and Li Jun Han decided it would have been too expensive to defend themselves, according to their attorney Seth Weisburst.

“The restaurant and its owners had to make the difficult business decision to settle these claims instead of spending significant resources on attorneys' fees and several years in court,” Weisburst wrote in a statement.

Five workers are also getting $70,000 from Z & Y in a separate settlement over retaliation, which alleges Zhang and Han reduced hours, disciplined, fired or declined to rehire the employees after raising concerns about wage theft. Z & Y also denied any wrongdoing in the retaliation settlement.

The dollar amounts are not why Chinese Progressive Association executive director Shaw San Liu calls this “a historic settlement.” The workers also earned new policies at the Sichuan restaurant, such as paid workers' rights trainings, fair scheduling practices, transparent tip distribution and bilingual employee manuals.

“They were able to actually change the workplace for the better for future workers at this restaurant and hopefully other restaurants that look at this case,” Liu said. The Chinese Progressive Association and fellow nonprofit Asian Americans Advancing Justice — Asian Law Caucus supported the workers through the case.

The 22 Z & Y workers — servers, bussers and cooks who are all Chinese or Taiwanese immigrants — were inspired by the 2018 wage theft case at Kome Japanese Seafood Buffet in Daly City, which ended in a $2.6 million settlement covering 133 workers. In the past few years, local nonprofits also helped workers in wage theft cases against Mission Beach Cafe, Burma Superstar, Gordo Taqueria and more.

Ex-staffers at Z & Y described an exhausting environment where they were regularly underpaid.

On a typical Saturday at Z & Y, former server Wang said he'd arrive at 10:30 a.m. and leave at 11:30 p.m., after the last customer finally walked out the door. But he said he'd only get paid for the hours Z & Y was actually open, from 11 a.m. to 9:30 p.m. He said he also wasn't allowed to take his legally required 10-minute breaks.

“We don't have enough employees working in the front, so we don't have time to take breaks,” he said.

In addition to Z & Y taking a chunk of employees' gratuities, the restaurant also deducted credit card fees from the tips, according to Palyn Hung, an Asian Law Caucus attorney who represented the workers.

Z & Y's attorney denied Wang's and Hung's accounts, saying that they aren't accurate.

“The restaurant and its owners never ‘stole' any wages or tips from employees, nor did they retaliate against any employees. That simply did not happen,” said Weisburst.

But Hung said the new scheduling practices are a critical change for workers because they sometimes wouldn't know their work schedules until two days in advance, making it difficult to plan for child care and medical appointments. While San Francisco has a predictive scheduling law, it applies only to restaurants with more than 20 employees. The settlement requires Z & Y to post schedules two weeks in advance and allow for flexibility, such as workers trading shifts.

In the process of organizing, former Z & Y cook Li Liu said he and other workers were scared of losing their jobs because of their limited English skills and lack of knowledge about the country's labor laws.

“We are immigrants. We are a group of disadvantaged workers,” he said through an interpreter. “Asking the employer to pay back what they owe us, it was something we dreamed of, but it wasn't something we felt like we had the power to win.”

Now, Li Liu is cooking at another restaurant and feels more confident in protecting his rights as a worker. He hopes the Z & Y settlement encourages other low-wage employees to speak up about poor conditions at other restaurants.

Shaw San Liu points to dim sum destination Yank Sing's $4 million wage theft settlement in 2014 as the landmark case that laid the groundwork for immigrant workers at Z & Y and elsewhere. Nearly 300 staffers not only got back pay but also raises, health care benefits and a committee established so employees could regularly meet with management.

As the Bay Area recovers from the pandemic, Hung said the restaurant industry has an opportunity to improve working conditions — and workers should be involved in creating solutions.

“We classified restaurant workers as essential workers and we saw how important their work is, and if they're not safe and protected, then neither are we,” she said. “We can do better.”

Janelle Bitker is a San Francisco Chronicle staff writer.

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