On September 16, 2024, the California Labor Commissioner’s Office announced it reached a $1.7 million wage theft settlement with a franchisee restaurant owner. Approximately 550 workers who worked across five different restaurant locations in Bakersfield, California, will benefit under the settlement for not receiving proper wages, overtime, and meal breaks.
In November 2020, the Labor Commissioner’s Office began its investigation into the employer after receiving a report of alleged labor law violations at one of the locations. The investigation found that the owner had created five separate corporate entities for the five different locations and shared employees between the different locations. The owner had paid the workers the lower minimum wage rate at that time, which was meant for employers with 25 or fewer employees. Because the owner treated each location as separate, despite common ownership, and scheduled some workers to work at more than one location per day, some employees were denied overtime pay, proper meal breaks, and travel time pay when traveling from one location to another in the same day.
As a result of the investigation, the employer was cited for multiple wage and hour violations, including covered minimum wage violations, contract wage violations, meal period premiums, liquidated damages, and waiting time penalties.
The settlement serves as a notable reminder to California employers of the importance of strict compliance with the labor code and other wage and hour regulations in California. Certain California laws differ vastly from federal law, including overtime pay, meal and rest breaks, final pay, and more. Just one complaint from a current or former employee to the Labor Commissioner’s Office can have significant consequences for an employer. The California Legal Services team at Employers Council can assist members with questions related to the organization’s pay practices, hiring and termination, leaves of absence, and other employment law areas. Our team can be reached at CAinfo@employerscouncil.org.
Jaimie Graczyk is an attorney for Employers Council.