The California Labor Commissioner’s Office (LCO) has obtained a $1.7 million settlement from a Bakersfield-based Wingstop restaurant franchisee on behalf of 550 employees.
The LCO’s investigation found the owner had shuttled workers between his five Wingstops locations to deprive them of minimum wage, overtime, and meal breaks.
By treating each location as a separate employer in violation of Revenue and Taxation Code section 23626, the workers improperly received the lower minimum wage rate designated for employers with 25 or fewer employees.
As a result of moving locations during the workday, employees were:
- Denied overtime pay;
- Not compensated for missed meal breaks; and
- Not paid for time traveling from one location to another.
Labor Commissioner Lilia Garcia-Brower stated: “This case highlights abuses that take place in low-wage industries such as franchised fast-food restaurants where separate corporate entities are created by the same employer to improperly lower labor costs. The law is clear that such corporate schemes undercut law-abiding employers and circumvent worker protections.”
Take-Aways:
To avoid wage-related violations and penalties, businesses with multiple locations must obtain proper legal and tax advice. Our firm can conduct friendly reviews of company payroll and documentation practices before any government agency comes knocking with real or imagined employee grievances and millions in potential damages.
For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.
See also:
- Munched for Lunch – No Break for Paying Employee’s Meal Times (September 20, 2024)
- Timekeeping Policy – Fourth Dimension Attention: It’s in the Cards (February 24, 2023)
- Muffle The Kerfuffle – Workplace Policy Handbook & Forms for 2024 (September 6, 2024)
Cindy Bamforth
September 27, 2024