6/12/2018 - “let TERG audit your company’s Wage and Hour Policies and Transactions”

California fines Cheesecake Factory $4.5M for wage violations!


Cheesecake Factory Restaurants Inc. shares responsibility for a janitorial subcontractor’s wage violations that total more than $4.57 million, according to a ruling by the Labor Commissioner's Officeof the California Department of Industrial Relations.

The Labor Commissioner’s Office issued citations totaling more than $4 million against Cheesecake Factory Restaurants, Inc. (NASDAQ:CAKE) and contractor Americlean Janitorial Services Corp., which subcontracted cleaning services at eight restaurants to Magic Touch Commercial Cleaning.

Cheesecake Factory was charged under California Assembly Bill 1897, which says client employers that obtain labor from a subcontractor are equally responsible for the contractor's workplace violations.

Magic Touch owner Zulma Villegas must pay $3,936,359 in minimum wages and overtime, liquidated damages, waiting time penalties and meal and rest period violations, according to the ruling. The citations include $632,750 for failure to provide properly itemized pay stubs and other civil penalties.

Investigators found that 559 janitorial workers who were employed at eight Cheesecake Factory locations in Orange and San Diego counties were often detained for inspections after working eight-hour shifts with no breaks, and sometimes worked up to 10 hours a week of unpaid overtime.

California Labor Commissioner Julie Su told the Los Angeles Times that the wage theft citation was a significant step in sending a message about abuse of contractors and subcontracted workers.

Cheesecake Factory said it is reviewing the allegations “will respond to the wage citation within the time provided,” per the Times.

"This case illustrates common wage theft practices in the janitorial industry, where businesses have contracted and subcontracted to avoid responsibility for ensuring workers are paid what they are owed," said Su in a statement. "Client businesses can no longer shield themselves from liability for wage theft through multiple layers of contracts. Our enforcement benefits not only the workers who deserve to be paid, but also legitimate janitorial businesses that are underbid by wage thieves."

During the Labor Commissioner's investigation, Villegas changed her business name and began operating as Z's Commercial Quality Cleaning, per the Commissioner's Office.

In 2014, Su launched a multilingual public awareness campaign that defines wage theft and informs workers of their rights and the resources available to them.


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