Three restaurant companies based in Southern California will have to pay nearly $500,000 to settle claims that they systematically underpaid workers in violation of Los Angeles County’s minimum wage ordinance. The ordinance since 2016 has required companies in unincorporated Los Angeles County – regardless of size – to increase wages annually through each July through 2021, when it will be $15/hourly.
As our L.A. wage theft attorneys understand it, county investigators with the Department of Consumer and Business Affairs discovered the restaurant corporations underpaid nearly 100 workers going back at least three years. Although the companies were reportedly in compliance with state minimum mandatory wage laws, they did not comply with the local ordinance. A representative from one of the restaurants said it was a misunderstanding, as two of the 19 locations owned by the companies are technically located in unincorporated L.A. County, despite having mailing addresses in the incorporated municipalities. While the state minimum wage for workers was $12 or $13 hourly (depending on the size of the company), the county’s minimum wage was $14.25. When the mistake was discovered, the spokesman said the companies immediately moved to rectify it.
County investigators said whether it was an honest mistake or the motives were more insidious, employers have a responsibility to pay their employees fairly. When they do not, there are consequences.
California Wage Theft a Longstanding Problem
Wage theft has been an ongoing problem in Los Angeles and throughout California in recent years. It’s a term that covers numerous kinds of worker pay violations. As outlined by the state’s Department of Industrial Relations, wage theft can include (among other actions):
- Paying less than minimum wage
- Withholding tips
- Not allowing meal or rest breaks
- Not reimbursing workers for business expenses
- Not paying split shift premiums
- Unauthorized deductions from pay
The U.S. Department of Labor reported not long ago that there are approximately 372,000 wage theft violations a WEEK – just in California alone.
Victims are often low income workers, who comprise almost one-third of the state’s labor force. These include restaurant servers, stock workers, seamstresses, auto mechanics and caregivers for the elderly who may suffer particular hardship when they don’t receive all of their pay. Yet many fear retaliation if they speak up. That’s why it’s important for workers to discuss their legal options with a wage theft attorney.
The state Labor Commissioner’s Office reports about 8 out 10 employers pay at least some part of the claims before the cases get to the judgment phase, but a much smaller number receive the full amount of what they are owed when a judgment is issued. SB 588, a law passed last year, gives the state’s Labor and Workforce Development Agency new powers to collect post-judgment payments. Some companies have faced lawsuits from the agency attempting to prevent the kind of fraudulent transfers intended to hide assets and cheat workers out of settlement and verdict payouts they are owed.
Last year, state labor officials announced the largest wage theft case against a private employer in the state’s history (nearly $12 million in citations against a construction company), and announced that stealing from workers wouldn’t be tolerated.
Contact the employment attorneys at Nassiri Law Group, practicing in Orange County, Riverside and Los Angeles. Call 714-937-2020.
‘We’re Being Robbed’: Wage Theft in California Often Goes Unpunished by State, Oct. 16, 2019, By Eli Wolfe, FairWarning