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LA fines Carl's Jr. $1.45M for alleged wage theft

27 June 2017

The Office of Wage Standards (which oversees the city's minimum wage ordinance) launched an investigation into the fast-food chain after a Carl's Jr. employee made a report to their office.

The lawsuit is seeking more than a $1.4 million fine from the fast food chain because it allegedly did not pay 37 workers the accurate wage. "This is a major corporation that should know the rules", Feuer said.

Similarly, in the city of Los Angeles and the unincorporated areas of Los Angeles County, for employers with more than 25 employees, the minimum wage will be increased from $10.50/hour to $12.00/hour. "Anything less is a slap in the face to workers struggling to make ends meet", Feuer said in a statement.

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The company has 30 days to respond to the complaint and an additional 15 days to appeal.

The City of Los Angeles isn't too happy with Carl's Jr. right now. According to Fox 11, the city has ordered Carl's pay $910,010 in penalties to the 37 workers (fines were assessed daily since the initial infraction), as well as $541,423 in fines for other infractions, which include the failure to post signs displaying the wage laws, and the failure to allow city investigators to contact certain employees.

The company's spokesperson also said they are "willing to pay a reasonable fine for our mistake", but they are objecting to the "excessive demands" made by the Office of Wage Standards, the CKE statement said.

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CKE Restaurants, which moved to Franklin, Tenn. from Carpinteria in March, said that it learned in April through an external audit with the two city agencies that some employees were not paid the minimum wage and sick leave due to a payroll error, and that the employees were compensated the $5,400 in total they were owed.

Reamer also disputed the idea that the $1.45 million amount in penalties is excessive, saying that they are meant to address the hardships the company's "low-wage" workers went through when they were not paid their full wages.

Los Angeles initially raised its minimum wage from $10 to $10.50 on July 1, 2016. How much under the minimum wage they were paid an hour varied, officials said. If the company doesn't comply, the city attorney could force it to pay through a civil action.

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LA fines Carl's Jr. $1.45M for alleged wage theft