Los Angeles Demands Carl’s Jr. Pay for Alleged Minimum Wage Violations

The city of Los Angeles has threatened fast food chain Carl’s Jr. with legal action if it does not pay $1.45 million to cover alleged minimum wage violations.

A recent Los Angeles Times article reported that city officials claimed that two Los Angeles Carl’s Jr. locations had failed to post any notices for current minimum wage rates, sick benefits, and other employee rights as required under the city’s minimum wage rates. Parent company CKE Restaurants Holdings Inc. blamed the minimum wage deficiencies on “an inadvertent payroll error.”

The company stated that 37 Los Angeles employees were affected, were quickly paid full in the total amount of $5,400. The company also stated the city’s demand of $1.45 million was “unreasonable” and unconstitutional.

Overview of Alleged Carl’s Jr. Minimum Wage Violations

After receiving a tip from an employee, the Los Angeles Office of Wage Standards initiated an investigation which eventually resulted in the allegations of minimum wage violations against Carl’s Jr.

The city alleged that Carl’s Jr. failed to pay employees the state’s minimum wage rate of $10.50 per hour between July 1 and Dec. 31, 2016. The investigation revealed employees worked at seven out of the 13 Carl’s Jr. chain locations in Los Angeles and were paid $10 or $10.25 per hour instead of the standard of $10.50.

While the monetary difference of $.25 may not seem significant, it was severely impactful on the employees and their families. The Los Angeles minimum wage rate was raised to $10.50 per hour from $10 on July 01, 2016, which was the first step for the state’s effort to raise the minimum wage rate of $15 per hour in 2020.

The city of Los Angeles is demanding the fast food giant pay $910,010 in penalties to the 37 employees affected by the alleged missing minimum wage payments, along with an additional $541,423 in penalties and fines. If CKE does not make the payments, the city has threatened to take civil legal action against the company.

Meanwhile, CKE is insisting that they have already have paid their employees and object to the city’s due to the city’s “excessive demands.” Even though CKE is complaining about the amount, city attorneys are standing by their demands for penalties and restitution.

The seven Los Angeles locations affected represent “a systemic failure to comply with the city’s laws,” city attorney Mike Feuer said in a statement to the Los Angeles Times.

According to California minimum wage requirements, companies must pay their non-exempt employees an hourly rate of either $10 per hour or $10.50 per hour. The larger amount is designated for larger companies, employing over 26 or more workers.

Under California labor laws, employees are entitled to overtime benefits if they work over 40 hours a week or eight hours in a single work day. Employees then must be paid 1.5 times their hourly rate, and must be compensated for all missed meal breaks or rest periods.

California employees who believe they were not sufficiently paid their minimum wage benefits may be able to file legal action against their company.

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