City Takes On Carl's Jr. For Allegedly Failing To Pay Workers Minimum Wage

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(Photo by Chris Yarzab via the LAist Featured Photos pool on Flickr)

Remember how the City of L.A. passed that historic minimum wage ordinance in 2015? You know, the one that made us the then-largest city in America with a $15 minimum wage, which would be enacted incrementally over the next five years? Of course you do, it was a giant deal!

Well, apparently the people in charge of paying workers at fast-food chain Carl's Jr. had a little more trouble with it. On Monday, L.A. City Attorney Mike Feuer alleged that the chain had paid below-minimum-wage rates to 37 local workers for a six-month period from July 1, 2016 (when the first wage hike went into effect) through December 31, 2016. The city is seeking $1.45 million from the chain in restitution and fines.

"L.A. law is clear: employees must be paid at least the minimum wage. Anything less is a slap in the face to workers struggling to make ends meet," Feuer said in a statement. "This is a major corporation that should know the rules."

Carl’s Jr.’s parent company, CKE Restaurants Holdings Inc., told the L.A. Times that the shortfall was due to “an inadvertent payroll error.” The company also told the Times that $1.45 million they have been asked to pay was “on its face simply unreasonable” and unconstitutional.

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. City Attorney's office spokesman Frank Mateljan told LAist that all 13 Carl's Jr. locations in the city were then investigated, with alleged wage violations found at more than half of those restaurants. The Daily News reports that the seven locations with wage violations are located in Studio City, Sun Valley, Boyle Heights, downtown Los Angeles, Westchester, Harbor Gateway and central Los Angeles.

The City Attorney's office also cited the company for allegedly failing to post the notice of the current minimum wage rate, sick time benefits and employee rights at two L.A. locations. These postings are required under the city's minimum wage ordinance.

The majority of the $1.45 million that the city is demanding from Carl's Jr. is comprised of penalties ($85 per worker per day) that would go to the company employees who were allegedly underpaid. Those penalties, which would be delivered to and distributed by the Office of Wage Standards, total out to $910,010. There are also just north of a half million dollars in penalties and fines that would be payable to the City of Los Angeles, as well as $4,574 in unpaid minimum wage owed to workers, according to Mateljan.

Now that the chain has been served with an administrative citation, they have 30 days to pay the penalties and fines. If they fail to do so, the City Attorney's office can then take civil action against the company.

The City Attorney also took to Twitter to urge any employees who aren't being fairly paid to reach out to his office, and touted the city's wage theft hotline: