Los Angeles city attorneys are putting up a fight against fast food mega-chain Carl’s Jr. this week, alleging some $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 simple “payroll error,” though they argue the amount of money missing from some 37 employees’ paychecks is well below the number the city is relying on. Reps for Carl’s Jr. claim to have paid out just $5,400 to give the workers their missing funds after correcting a six-month issue that found workers only making $10 or $10.25, instead of the city-mandated $10.50.
So where does the $1.45 million number come from? More than $900,000 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. According to the LA Times, City Attorney Mike Feuer said of the money in a statement that “LA law is clear: Employees must be paid at least the minimum wage,” while CKE argued that the fines were beyond what they should be expected to pay.
While the high price tag and big brand name of Carl’s Jr. will certainly draw eyeballs to the case, the rest of Los Angeles’s restaurant scene is facing its own coming minimum wage crisis. Hourly wages will jump to $12 as of this Saturday, and continue upwards until $15 an hour by 2020, leading to a massive shift in restaurant models (and menu prices) across the land.