Cheesecake Factory found partially liable in $4.57M wage theft case
- A group of Cheesecake Factory restaurants in California has been found partially liable in a wage theft case involving janitorial workers managed by Magic Touch Commercial Cleaning, a subcontractor for the restaurants, according to a statement from the California Labor Commissioner's Office. The total penalty amount of $4.57 million includes $3.94 million in unpaid minimum wages, overtime, liquidated damages, waiting time penalties and meal and rest period premiums.
- The case includes 559 janitorial workers — all of them managed by Magic Touch — at eight restaurants. Americlean Janitorial Services Corp., which subcontracted the workers to Magic Touch, is also partially liable. The citations include an additional $632,750 for failing to provide correctly itemized pay stubs, as well as other civil penalties.
- Investigators in the case said the janitorial workers' shifts started at midnight and extended into the morning hours, during which time they were not given proper meal and break periods, the California Department of Industrial Relations said. After working eight hours, the workers were not released until Cheesecake Factory managers did walk-through inspections, which frequently led to additional tasks for the workers. This practice resulted in workers accumulating up to 10 hours of unpaid overtime each week.
Under California law, workers who are paid less than the minimum wage may be entitled to liquidated damages in the same amount of the underpaid wages, plus interest. When employers intentionally fail to pay all the compensation workers are due, waiting time penalties kick in. Penalties are calculated by multiplying the employee's daily pay rate by the number of days the employee was not paid, up to a 30-day maximum.
“Client businesses can no longer shield themselves from liability for wage theft through multiple layers of contracts," California Labor Commissioner Julie A. Su said in a statement. "Our enforcement benefits not only the workers who deserve to be paid, but also legitimate janitorial businesses that are underbid by wage thieves.”
Top U.S. companies have paid billions to settle cases instead of engaging in protracted court cases, but the violations are not always intentional. Employers may want to be stringent about keeping accurate wage and hour records and following overtime rules set by the Fair Labor Standards Act, the requirements of which are slated for change as soon as 2019. Compliance efforts may need to include training of managers and supervisors on the law's provisions as well.
- California Department of Industrial Relations Labor Commissioner’s Office Cites Cheesecake Factory, Janitorial Contractors More Than $4.5 Million for Wage Theft Violations
- HR Dive Wage theft settlements by top US companies amount to billions