Officials from the city of Los Angeles have accused Carl’s Jr., a fast food chain, of underpaying dozens of local workers for a period of half a year. The city has now slapped Carl’s Jr. with fines and restitution charges totaling $1.45 million for being in violation of the minimum wage rules. About $910,000 of the total amount that the city is demanding will be paid to the 37 affected employees while $541,423 will be paid as fines and penalties.
“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,” Mike Feuer, the City Attorney, said.
CKE Restaurant Holdings, the parent company of the fast food chain, laid the blame on a payroll error. The firm added that the affected employees had been paid the amounts owed to them as a result of the error. In its defense the chain which is based in Franklin, Tennessee, said the demand of $1.45 million by the city was unconstitutional and unreasonable.
The city’s investigation was started after the Bureau of Contract Administration’s Office of Wage Standards was tipped by an employee of the fast food chain. Information received from the workers indicated that the minimum wage violation occurred between July 1, 2016 and December 31, 2016. The affected employees were stationed at seven locations and they received either $10 an hour of $10.25 rather than the mandated $10.50.
Los Angeles’ minimum wage was raised to $10.50 per hour beginning last year on July 1 and was the first phase in a plan to have the minimum wage reach $15 in 2020. This year on July 1, Los Angeles’ minimum wage will be raised to $12 per hour.
According to city officials, Carl’s Jr. was also guilty of not posting information indicating the present minimum wage as well as employee rights and sick-time benefits in Los Angeles at two of its restaurants located in the city as required by law.
In the event that CKE does not make the payments, the result would be civil legal action being taken against the firm. CKE has admitted that it would be willing to pay a fine that is reasonable but that it would have to defend itself against excessive demands.
Besides Carl’s Jr., CKE also owns other fast-food outlets such as Red Burrito, Green Burrito and Hardees.