In the second part of our blog series on the lawsuits filed by the Labor Commissioner’s Office, we covered a Chula Vista restaurant, La Querencia, who deprived their workers of their hard-earned pay and was ordered to pay over $274,000. You can review our last blog post here: (http://bit.ly/2y3MUuX).
With information provided to us from the State of California Department of Industrial Relations’ new release, the Labor Commissioner’s Office has cited a Jack in the Box franchise operator $903,084. The franchise’s owner, Nor-Cal Venture Group, Inc., misclassifed 40 managers as exempt and denied them overtime pay. This case is an great example on how important it is for employers to be aware of overtime protection laws along with how to correctly classify their employees.
Nor-Cal Venture Group, Inc. owns 26 Jack in the Box franchises in California, most of the which are in the greater Sacramento area. The Labor Commissioner’s Office opened an investigation after receiving a complaint and found that 40 employees were misclassified as exempt. As managers, they were required to work a minimum of 45 hours per week with no overtime, regardless of how many hours they worked.
“For these employees, being misclassified as managers resulted in being paid less then minimum wage,” said Labor Commissioner Julie A Su. “That’s not an acceptable way of doing business in California, and my office will continue to enforce labor laws that uphold that wage floor.”
Managers who spend less than half of their work time on managerial duties must be paid overtime. Investigators determined that the 40 workers were performing the same duties as other employees.
The citations issued to Nor-Cal Venture Group, Inc. include $416,783 in unpaid overtime wages and penalties, $218,227 in minimum wage violations and penalties, $169,427 in liquidated damages and $98,647 in waiting time penalties for 16 of the workers, who were not paid the conclusion of their employment. When workers are paid less than minimum wage, they are entitled to liquidated damages that equal the amount of underpaid wages plus interest.
In 2014, Commissioner Su launched the Wage Theft is a Crime multilingual public awareness campaign. The campaign defines wage theft and informs workers of their rights and the resources available to them to recover unpaid wages or report other labor law violations. Employees with work-related questions or complaints may contact DIR’s Call Center in English or Spanish at 844-LABOR-DIR (844-522-6734).
Employers should also be aware of Senate Bill 459, passed on September 8, 2011, which prohibits the willful mis-classification of individuals as independent contractors. The legislation not only prohibits making deductions or charging fees from the compensation paid to those misclassified workers, but also creates civil penalties of between $5,000 and $25,000 per violation.
Employers can learn from the three lawsuits so they can correctly follow labor laws and avoid being fined for mis-classification and wage theft. For more information you can visit the State of California Department of Industrial Relations website: https://www.dir.ca.gov/.
