by Julie Ann Giammona and Michelle R. Ferber

In the past three months, the Labor Commissioner has been busy investigating and issuing multi-million-dollar citations against employers for what it refers to as “wage theft.” Such violations include failure to pay overtime, minimum wage, split shift premium and failure to provide the required meal periods.

In March, a weight loss and fitness chain in southern California was cited for $8.3 million dollars in violations relating to failure to pay overtime because it paid its trainers separate paychecks for each location they worked, thereby avoiding overtime. Then in June, seven Bay Area restaurants were fined more than $10 million dollars after investigators determined that cooks and dishwashers were not being paid overtime, minimum wage and premium pay for working split shifts.  A few days later, the Labor Commissioner hit the Cheesecake Factory for 4.6 million dollars, concluding that the company to which the Cheesecake Factory sub-contracted its janitorial services locked workers in the restaurants working from midnight until the morning with no breaks or meal periods, then refused to let the workers leave when their shifts were over until after a supervisor inspected the area, resulting in approximately 10 hours of unpaid overtime each week.  The Labor Commissioner stated: “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.”

It is important to note that California’s Labor Code specifically provides that under certain circumstances, employers are liable for the wage and hour violations of their sub-contractors. The burden remains with the employer to ensure compliance with wage and hour laws, including minimum wage, overtime, and meal and rest breaks. Given the Labor Commissioners’ recent investigations and multi-million-dollar citations, if you have questions or concerns about your employment practices, please consult an attorney at Ferber Law who will provide expert advice in this complex area of the law.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.