Employer paid lower minimum wage instead of higher one, finds Labor Commissioner's Office
The California Labor Commissioner’s Office (LCO) has tasked five Wingstop restaurants and their owner to pay $3,161,606 for wage theft violations that affected 551 workers.
The employer paid the workers less than what it should have, according to the LCO.
LCO started investigating the incident in November 2020 after receiving a Report of Labor Law Violation for one of the locations in Kern County, Bakersfield.
It found that between 2019 and 2022, the five Wingstop locations were each operating as separate corporate entities, although Clinton Lewis owned and operated each of them and shared employees between the multiple locations. Treating each location as a separate employer, Lewis paid the workers the lower minimum wage for small employers with 25 or fewer employees: $11, $12, $13 and $14 per hour for each year.
However, LCO determined that legally, Lewis’s restaurants were a single employer at the five locations, and the workers should have been paid the higher minimum wage for employers with 26 or more employees: $12, $13, $14 and $15 per hour from 2019 through 2022.
Overtime pay denied
The investigation also found that Wingstop workers scheduled to work at more than one Wingstop in one day were denied overtime pay when they worked more than eight hours in a workday or 40 hours in a workweek.
The employer also avoided paying missed meal break premiums to workers when scheduling them to work at more than one location, and employees were not paid for off-the-clock work for their time traveling from one worksite to another during the workday.
“This case highlights abuses that take place in low-wage industries such as franchised fast-food restaurants where separate corporate entities are created by the same employer to improperly lower labor costs,” said Lilia García-Brower, labor commissioner. “The law is clear that such corporate schemes undercut law-abiding employers and circumvent worker protections.”
Breakdown of fines
The LCO’s Bureau of Field Enforcement issued citations to Hot Wing Holdings Group, Inc., The Northwest Bakersfield Wing Company Inc., The East Bakersfield Wing Company Inc., The Bakersfield Wing Company, Inc., The Southeast Bakersfield Wing Company Inc., and Clinton Lewis dba Wingstop.
The five corporate entities and Lewis, as an individual, are each jointly and severally liable for:
- $190,741 in minimum wage violations
- $4,323 for contract wages
- $57,312 for overtime
- $87,656 for meal premiums
- $238,569 for liquidated damages
- $1,307,980 for waiting time penalties
These sum up to $1,886,581.
The citations also include interest on those penalties totaling $77,124, all of which are payable to the 551 employees. The five corporate entities and Lewis, as an individual, are also jointly and severally liable for civil penalties totaling $1,197,900.
Last Month, California introduced legislation that would give workers a minimum pay of $20 per hour.