The city of L.A.’s Office of Wage Standards has ordered Carpinteria-based fast food company Carl’s Jr. Restaurants to pay $1.45 million in restitution and fines for minimum wage violations at seven of its L.A. corporate-owned restaurants.
The company failed to pay 37 employees the required $10.50 per hour between July 1, 2016, and Dec. 31, 2016, the City Attorney’s Office said in a statement Monday. The city’s minimum wage increased to $10.50 on July 1, 2016, the first of several increases through 2020. The Office of Wage Standards began an investigation after a tip from a Carl’s Jr. employee.
“This is a major corporation that should know the rules,” L.A. City Attorney Mike Feuer said in the statement. “Our offices will always aggressively stand up for workers to ensure they get the wages they’re owed, and all the protections and benefits the law demands.”
A spokeswoman for Carl’s Jr.’s parent company CKE Inc. who didn’t want to be named said that the company made an “inadvertent payroll error” and paid back the employees the roughly $5,400 it said it owed them.
“The (Office of Wage Standards) believes that the fine for this violation should be $1.45 (million) – more than 268 times the total of the wages that were paid to our employees,” the spokeswoman said. “Our employees have been made whole, and we are willing to pay a reasonable fine for our mistake. However, given the excessive demands of the (Office of Wage Standards), we have no choice but to defend against any (Office of Wage Standards) actions.”
CKE Inc. has 30 days to pay the fines, according to Frank T. Mateljan III, a spokesman for the City Attorney’s Office. If the company doesn’t comply, the city attorney could force it to pay through a civil action.
Serving as CKE Inc. chief executive at the time of the alleged violation was Andy Puzder, President Donald Trump’s former nominee for secretary of labor. Puzder, who helmed the company since 2000, resigned in March amid a backlash to his position after some questioned his track record on workers’ rights.
Atlanta private equity firm Roark Capital Group acquired a majority stake in CKE Inc. for an undisclosed amount in 2013. The restaurant company, which also owns the brands Hardee’s, Green Burrito and Red Burrito, generated about $3.9 billion in system-wide sales, the company said at the time.
Caroline Anderson is a staff reporter covering restaurants, retail and hospitality. She can be reached at firstname.lastname@example.org.