Cheesecake Factory Inc. (NASDAQ: CAKE), along with two of its contractors, have been found liable in a wage theft case in regards to hundreds of janitorial workers in California. Julie Su, California Labor Commissioner, said the wage theft citation was the largest she knows of in the janitorial industry.
After an 18 month investigation by the Labor Commissioner’s Office, it was discovered that 559 workers were underpaid at eight locations in Orange and San Diego counties. The eight locations are Brea, Irvine, Huntington Beach, Newport Beach, Mission Viejo, Escondido, Friars Road, and Harbor Drive.
The cheesecake restaurant chain had a contract with Americlean Janitorial Services Corp., which subcontracted work to Magic Touch Commercial Cleaning. Testimonial from Maria Lugo, who worked as a janitor at a San Diego Cheesecake Factory for Magic Touch, said she would clean the restaurant for nine to ten hours a night.
Each worker reportedly logged up to 10 hours of unaccounted overtime each week due to policies forbidding workers to leave after their supposedly eight hour shift until a Cheesecake Factory kitchen manager investigated their work. The kitchen manager would often give additional tasks that had to be finished before the workers could leave, according to a statement issued by state officials. State investigators found that janitors would begin their cleaning shifts at around midnight and worked their whole shift without any proper meal or breaks to rest.
This is not the first time Cheesecake Factory janitorial contractors were accused of wage violations. The first two cases occurred in 2007 and 2010, but this time around, they will be held accountable in the fines.
“This marks the third time the Cheesecake Factory has stood by as the people who clean their restaurants had thousands of dollars in wages stolen from their paychecks. This time is different. Because of new laws in the state, the Cheesecake Factory will also be held accountable for the stolen wages of the people who clean their restaurants,” said Lilia Garcia-Brower, executive director of the Maintenance Cooperation Trust Fund.
It is common business practice for large corporations to contract and subcontract to avoid responsibility for ensuring proper worker wages. However, a 2015 California state law states that employers relying on subcontractors for labor can be held liable for those subcontractors’ workplace violations, which made all three companies liable.