Kenyan Swahili Village restaurant in US ordered to pay $527,000 for wages and tips theft

A Kenyan-owned US fine-dining restaurant that landed itself in the soup for allegedly stealing and swallowing up wages and tips from workers in breach of Washington DC labour laws has agreed to scoop itself from the frying pan by coughing up $527,000 in penalties.

Swahili Village, an eatery famed for its fine African cuisine, and has had the honour of hosting President William Ruto and his predecessor Uhuru Kenyatta for meals, on Tuesday agreed to pay the amount in an out-of-court settlement of a lawsuit filed by District of Columbia Attorney-General Brian Schwalb in 2023.

Its Kenyan founder Kevin Onyona and his Chief Operating Officer Emad Shoeb found themselves in hot water after investigations by Mr Schwalb’s office found that they (allegedly) “systematically stole wages and tips from servers, hosts, food runners, bussers, and bartenders and violated multiple DC labour laws.”

The restaurant, according to the investigators, “rampantly and systematically violated the city’s tipped minimum wage law and other worker protections,” and turned some its workers into “chattel slaves”.

The defendants, who sometimes refer to the restaurant as “The Consulate” because of its proximity to Embassy Row in Washington, denied any wrongdoing in their response to the attorney-general’s lawsuit.

Under the terms of the settlement registered at the Superior Court of the District of Columbia, Swahili Village DC and Mr Onyona are required to pay more than $260,000 to 72 restaurant workers, fund the process to distribute worker restitution to the tune of and pay $197,614 in penalties to the District of Columbia.

The restaurant founded in 2016 is also required to change its practices to comply with district wage and hour laws and provide reports of compliance to the attorney-general for three straight years.

“It is unacceptable and illegal for businesses to steal from their hardworking employees, depriving them of the full benefits they have earned and are legally entitled to,” said Mr Schwalb.

“Employers that do so are not only exploiting their workers but are gaining an unfair advantage over their competitors who play by the rules.”

As part of the settlement, Swahili Village and Onyona, a self-taught chef, will also pay a claims administrator chosen by the DC authorities whose responsibilities will be to distribute the owed money to the affected employees.

“Within 30 days of the creation of this account, Swahili Village and Onyona will deposit an initial lump sum payment in the total amount of $138,170.77 into the worker share account. Within five days of the deposit, Swahili Village and Onyona shall provide the district with proof of the lump payment,” the settlement reads in part.

“Swahili Village and Onyona will make 11 monthly deposits into the Account as follows: On or before the 5th day of each month for 10 months following the lump payment, Swahili Village will deposit the total amount of $16,904.46 into the account.”

“On or before the 5th day of the month following the final monthly payment, Swahili Village and Onyona will deposit the total amount of $22,142.93 into the worker share account— bringing the deposits into the account in the total amount of $329,358.30, at which point the Worker Share Account will be considered fully funded.”

Mr Schwalb described the settlement as “a significant win for dozens of Swahili Village workers who were mistreated and continues our office’s commitment to combatting wage theft in the District of Columbia.”

The news of the hefty penalties, which the US media said was one of the largest settlement against a restaurant in DC, was greeted with gratitude from the affected workers.

"I know firsthand that too many people work hard every day but still struggle to keep the lights on, provide food for their families, and pay for healthcare," said Mr Rowles Adams, a former bartender at Swahili Village.

"When we get new jobs, we see them as opportunities. We ask 'how can I succeed?' and 'what are the next steps I can take to make life better for myself and my family?' We don't ask 'will I be paid for all the hours I worked this week?' or 'is this company breaking the law?' Unfortunately, working at Swahili Village raised those negative questions.”

According to Mr Adams, Swahili Village took advantage of the ignorance of some its workers— the majority people of colour and many being young African immigrants, including Kenyans— about DC labour laws.

“For months, I saw managers mistreat my coworkers, including many young immigrants who did not even realize that what was happening was wrong. I spoke out, but it didn't change things.”

“I’m so grateful that the lawyers from the attorney-general's office heard our plea for help and stood with us to get justice. I hope this case sheds light on the recurring issue of wage theft, especially in the restaurant industry, where tipped employees work twice as hard to survive and earn a living wage."

The settlement, Mr Schwalb said, does not constitute an admission of guilt by the restaurant or its owners and cannot be used as evidence of fault in any civil or criminal prosecutions against the company.

Mr Onyona on Tuesday told The Washington Post that said he agreed to the settlement “just to get this thing off my back” and get back to running his restaurant.

He said he would have to borrow money to meet the obligations of the agreement, and let go “at least” 20 employees.

According to the lawsuit that Mr Schwalb had filed at Superior Court of the District of Columbia, the affected workers got nought in tips from clients even after Swahili Village added a 20 percent gratuity to all charges.

The restaurant owners were also accused of failing to keep regular payroll records, in what the authorities describe as “a clever move that concealed evidence on how the employees’ pay was calculated and whether statutory deductions were made”.

The attorney-general’s suit disclosed that some of the violations that Swahili Village committed included turning its workers into “chattel slaves”.

According to suit papers, some employees worked 60 hours of work in a week, which gives them 20 hours of overtime, but they never received overtime rates calculated at 1.5 times the regular pay per hour of pay compensation as provided for in the employment and labour laws.

In addition, Mr Onyona and Mr Shoeb allegedly never observed labour guidelines where all employers must give their employees paid time off.

However, when employees failed to report to work due to illnesses, they allegedly got reprimanded for missing work.

“These egregious and systemic violations, which persisted for years, reveal that wage theft and worker abuse were no accident at Swahili Village DC—they were part of the business plan,” the AG says in court papers.

Mr Onyona opened the original Swahili Village in College Park in 2009. He opened the M Street address in March 2020, and another branch in Newark, New Jersey, the following year.

A month after the case was filed last year, President Ruto, who was on an extensive tour of the US, visited the restaurant in New Jersey and lauded the businessman for establishing “such kind of enterprise in the US”, adding the move is worth celebrating.

“We’re very proud as Kenyans, and I’m very proud as a Kenyan leader that you hustled your way into this investment. We have come here to see what you’re doing, and you’re doing very well. The food is awesome, the ambiance is on another level, so congratulations!” the President said on September 17, 2023.

Reported by Harry Misiko, Hillary Kimuyu and Ruth Mbula.