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State steps in to cover lost wages for employees

Though only open for five months in West Linn, a local restaurant has left a wake of debt and unpaid employees.

Shenanigans’ opened in the Willamette Marketplace at 2070 Eighth Ave. on May 4, 2012, and suddenly closed its doors near the end of September 2012.

Shenanigans’ had been operating in Portland since 1983, but its owner, Paul Shiva, took a chance moving to West Linn last year.

“I was looking around for a new place. This opportunity came along, and West Linn is a great city,” Shiva told the Tidings back in May 2012.

The location included an upscale restaurant and the bar Tuxedo Charley’s, which hosted music, dancing and a happy hour. The location got mixed reviews on Yelp, an online business review website, with some complaining of the cavernous size of the building and others raving about the food.

Whether it was a cost-prohibitive lease or the lack of clientele, the restaurant closed its doors leaving an unknown number of employees without paychecks.

Since October, 15 former employees have filed claims with the Oregon Bureau of Labor and Industries (BOLI), totaling nearly $14,000 in combined lost wages.

According to BOLI Communications Director Bob Estabrook, the claims vary in size from just $66 up to $3,200, with the average claim around $1,000.

BOLI is a state agency set up to protect employment rights, enforce compliance with state laws, educate and train employers about wage laws and promote a skilled and competitive workforce in the state. To help enforce its goal, BOLI employs a wage security fund, which was established by the Oregon Legislature in 1985. The fund pays the unpaid wages of employees when a company, such as Shenanigans’, goes out of business and doesn’t have the payroll to cover them.

According to Estabrook, when a claim comes in, BOLI investigates the business and determines whether the wages can be collected from the business. He said the BOLI investigator found that Shenanigans’ did not have the assets to pursue for collection.

Any employee who has lost wages due to the closing of a business can file a claim with BOLI for reimbursement for wages they earned up to 60 days prior to the door’s closing — with a maximum of $4,000 per worker. The funds do not, however, cover any untaken vacation time or sick leave.

Estabrook said businesses like Shenanigans’ closing their doors and being unable to pay final wages is not uncommon.

“Every year there are businesses that go under,” he said.

Each year BOLI handles up to 1,800 claims. During the last fiscal year, BOLI paid out $715,000 in unpaid wages to 537 employees statewide. That number included a large processing plant in eastern Oregon that employed 215 workers. That case paid out $250,000 in lost wages.

“The wage security fund is a pretty important tool we have,” Estabrook said. “Oregon is the only state that has this kind of safety net.”

He said claims must be made within six months of a business shutting down, and he expects more claims from Shenanigans’ employees to trickle in. This is not the first time claims have been filed against Shenanigans’. According to Estabrook, similar complaints were also filed in 1990, 2005, 2007 and 2008.

“It looks like there is a history of payroll difficulty with this business,” Estabrook said.

On the Shenanigans’ website, a message reads: “Shenanigans’ restaurant is currently closed. We thank you for your support over the years. We hope (to be) reopening soon again.”

Since 1986, the wage security fund has paid more than $14 million in benefits to more than 14,000 people. Money from the fund comes from a diversion of 0.03 percent of the state’s employment tax paid by employers for one quarter every odd-numbered year, according to the BOLI website.

For more information or to file a claim with BOLI, visit oregon.gov/boli or call the wage security fund division at 971-673-0761.

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