Owner of Sacramento-area gas stations pays employees $340,000 in labor violation case

Seven gas stations in the Sacramento area paid employees more than $340,000 in back wages and damages after an investigation by the U.S. Department of Labor’s Wage and Hour Division found minimum wage and overtime violations.

The stations’ owner, “used a variety of schemes and illegal practices to deny employees their rightfully earned wages,” Wage and Hour Assistant District Director Brandon Nuess said in a news release.

When employees worked more than 40 hours a week, the gas stations — owned by Darshan Mundy — paid them the same flat wage for extra time, violating overtime requirements, the Department of Labor said. Officials said Mundy also falsified payroll records to appear as though he paid overtime, and failed to combine hours employees worked across multiple gas stations that he owned.

Mundy said he wanted to assist employees who were struggling financially and who asked for more work, but he could not afford to pay overtime wages. In an effort to help, Mundy said he paid those employees regular wages for overtime hours logged at different gas stations — and that he did not know the practice violated labor laws.

“Those are needy people. They wanted extra hours, extra money. So I wrote their checks on the different companies,” Mundy said in an interview with The Sacramento Bee. “This was my innocent mistake.”

The Department of Labor also said Mundy did not pay new employees for their first 24 hours of work — which he called “training hours” — until a three-month “probationary period” had passed, a practice which violated minimum wage requirements.

Officials said that to make up for cash register shortages, Mundy illegally deducted money out of worker’s pay, or took cash straight from employees who were on site.

“Now, I’m following all the rules and my mistakes were corrected,” Mundy said. “I learned the hard way.”

Mundy owns four Chevron stations in Sacramento, a Chevron station and a Valero station in Davis, and a Chevron station in Lodi.

In addition to the $340,470 payoff, Mundy paid $45,963 in penalties for violations of the Fair Labor Standards Act, the Department of Labor said. He has promised to use a biometric timekeeping system at all gas stations and to educate and train current and future employees concerning their rights under FLSA.

This story was originally published June 24, 2020 at 2:28 PM.