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Cheesecake Factory Found Partly Liable In Multi-Million Dollar Wage Theft Case

California is serious when it comes to ensuring employees in the Golden State are paid fairly, given their breaks and get overtime when earned. This month, the Labor Commissioner's Office found a major restaurant chain is responsible for a slew of workplace violations involving sub-contracted employees — meaning employees that aren’t even hired by the business directly, but through a smaller company.  Now, the underpaid workers must be collectively paid millions of dollars in a wage theft case, state labor officials announced.

Cheesecake Factory Restaurants, Inc. was found partly liable in the case involving 559 janitorial workers who did not get paid for things like minimum wage, waiting time penalties, overtime or rest periods. The California Department of Industrial Relations announced on June 11 the results of their investigation, which was first launched in 2016, and named the company along with Magic Touch Commercial Cleaning as being responsible for not ensuring workers were correctly and fully paid.   Also found liable in the case was Americlean Janitorial Services Corp. — the restaurant business’s janitorial contractor that subcontracted the work to Magic Touch Commercial Cleaning,

The involved janitors were hired by Magic Touch Commercial Cleaning, but cleaned Cheescake Factory facilities overnight at eight locations across Southern California, in Orange and San Diego counties, according to the California Department of Industrial Relations.  

The workers would typically start their shifts around midnight and work until the morning without getting proper meal breaks or rest breaks, according to the state.  Then, after working a full eight-hour shift, the janitors had to wait for Cheesecake Factory staff to sign off on their work after doing "walkthroughs" in the morning.

“These walkthroughs would frequently lead to additional tasks that the janitorial workers had to complete before they were released for the day,” California labor officials said.  "This resulted in each worker logging up to 10 hours of unpaid overtime each week."

Minimum Wage, Rest Period Violations Equal Millions In Pay To Southern California Workers

The state said the workers are now due $3.94 million in minimum wages, overtime, liquidated damages, waiting time penalties and meal and rest period premiums.

"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 Labor Commissioner Julie A. Su. "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."

The state said the locations where the violations occurred included:

  • Brea Mall Way, Brea
  • Newport Center Drive, Newport Beach
  • Spectrum Center Drive, Irvine
  • The Shops at Mission Viejo, Mission Viejo
  • Edinger Avenue, Huntington Beach
  • Via Rancho Parkway, Escondido
  • Friars Road, San Diego
  • Harbor Drive, San Diego

The owner of Magic Touch Commercial Cleaning, Zulma Villegas, was fined a total of $3,936,359.  That money will need to be paid to her workers for unpaid minimum wages and overtime, liquidated damages, waiting time penalties and meal and rest period violations, according to the Department of Industrial Relations.   

Pay Stubs Must Be Itemized In California 

What’s more, the company did not provide properly itemized pay stubs and was fined an additional $632,750, officials said.  Pay stub violations in California are often treated very seriously.

If A Subcontractor Doesn't Pay, Then Whomever Hired Them May Be Liable For Their Labor And Wage Violations In California 

If Villegas’ company does not pay the millions owed to the California workers, then Cheesecake Factory and Americlean Janitorial Services Corp. are on the hook for $4,206,351 — even though they didn’t directly hire or manage the janitors, according to the Department of Industrial Relations and a New York Times report.

That’s thanks to a law that was signed by Gov. Jerry Brown in 2014 and took effect in 2015, which holds that "client employers that obtain labor from a subcontractor" are "responsible for their workplace violations," the Department of Industrial Relations said.  

Because of AB 1897, if you’re hired by a subcontracted company that doesn’t pay you fairly — you may be entitled to sue the company who hired them.  

"A client employer may be liable for the subcontractor’s owed wages, damages and penalties, as well as workers’ compensation violations," the state said.  

Experienced Employment Law Attorneys Can Help

Be sure to call an experienced California employment law attorney to find out if you may be owed money from your employer or their employer. Please contact Fernandez & Lauby employment lawyers today in order to have an attorney review your case or to get a free second opinion at anytime!

As for Cheesecake Factory officials, they told the New York Times that they take the alleged wage theft "very seriously."

“We are continuing to review the allegations and will respond to the wage citation within the time provided,’ Sidney M. Greathouse, the vice president of legal services at The Cheesecake Factory Inc., said in a statement given to the NYT.

By Fernandez & Lauby Staff
June 20, 2018

Cheesecake Factory Restaurants, Inc. was found partly liable in the case involving 559 janitorial workers who did not get paid for things like minimum wage, waiting time penalties

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--- Wednesday, June 20, 2018 ---

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