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What it could Cost Your Company for a Minimum Wage Claim

Posted on July 29, 2017

Carl’s Jr. Fined $1.45 million for Minimum Wage Violation

The City of Los Angeles has fined the restaurant chain Carl’s Jr.  $1.45 million in minimum wage violations and related penalties. That number covers more than three dozen workers at franchise outlets across the city over a six-month period, plus fines.

The issue stems from what Tennessee-based CKE Restaurant Holdings (the parent company of Carl’s Jr.) calls a “payroll error,” though they argue the amount of money missing from 37 employees’ paychecks is well below the number the city is fining them. Reps for Carl’s Jr. claim to have paid out $5,400 to give the workers their missing funds after correcting a six-month issue where workers were making $10.00 or $10.25, instead of the city-mandated minimum wage of $10.50.

More than $900,000 of the $1.45 million is purely penalties meant to go to the workers in question, while more than a half-million in further fines would be collected by the city directly.

As minimum wage in LA just went up again on July 1, 2017, employers should take a moment to review their pay rates and ensure they are following all local ordinances.

California State$10.50 (26 or more employees)$10.00 (25 or fewer)
El Cerrito$12.25
Emeryville$14.82( 56 or more employees)$13.00 (55 or fewer)
Los Angeles$12.00 (26 or more employees)$10.50 (25 or fewer)
Mountain View$10.30
Palo Alto$11.00
San Diego$11.50
San Jose$10.30
Santa Clara$11.00
San Francisco$14.00
Santa Monica$12.00 (26 or more employees)$10.50 (25 or fewer).

Lauren Sims is the author and the Director of Human Resources Consulting for eqHR Solutions.

Whenever you require professional Human Resources or Payroll guidance to navigate the ever-changing landscape of California and Federal Employment Laws & Regulations, contact us for a no obligation consultation.

eqHR Solutions offers professional, tactical and strategic, human resources support, ADP payroll product implementation/training and payroll processing services for businesses throughout Southern California.