At Cheesecake Factory restaurants in Brea, Irvine, Huntington Beach, Newport Beach, Mission Viejo, Escondido and San Diego, 559 janitors were cheated out of their wages, the California Labor Commissioner announced Monday, June 11.
The restaurant chain was found jointly liable with its janitorial subcontractors for $4.57 million in unpaid minimum wages and overtime, meal and rest period violations, as well as damages, waiting-time penalties and a failure to provide itemized pay stubs.
The investigation, launched in December 2016, covered a three-year period.
Cheesecake Factory subcontracted its cleaning to Americlean Janitorial Services Corp., a Minneapolis firm doing business as Allied National Services Inc. The workers were then managed by San Diego-based Magic Touch Commercial Cleaning, whose owner, Zulma Villegas, must pay the $4.57 million, Labor Commissioner Julie Su reported.
After the investigation began, Villegas changed her business name to Zs Commercial Quality Cleaning, which will also be held liable, the commissioner said. Magic Touch also does business as Zulma Villages.
However, if the state fails to collect from Villegas, the restaurant chain and the national janitorial firm will have to pay.
A 2015 California law holds employers liable for workplace violations even when they contract out the labor. Under Assembly Bill 1897 a client employer may be liable for the subcontractors owed wages, damages and penalties, as well as workers compensation violations.
“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,” Su said.
“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.”
Investigators found that Cheesecake Factory janitors began shifts around midnight and worked until morning without proper meal or rest break periods. After working for eight hours, the Magic Touch workers were not released until Cheesecake Factory managers conducted walkthroughs to review their work.
According to the commissioner, the walkthroughs often led to additional tasks which resulted in each worker logging up to 10 hours of unpaid overtime each week.
Sidney Greathouse, Vice President, Legal Services at The Cheesecake Factory, said in a statement, “We take matters of this nature very seriously. We are continuing to review the allegations and will respond to the wage citation within the time provided.”
Allied National Services did not immediately respond to requests for comment. Zs Commercial Quality Cleaning was unlisted.
The investigation was sparked by reports from two nonprofits that have been working to combat rampant wage theft in the janitorial industry. Workers in the investigation were represented by the Maintenance Cooperation Trust Fund, a Los Angeles-based watchdog organization and the Employee Rights Center in San Diego, a nonprofit that assists low-wage workers without union representation.
“Stolen wages are business as usual for contracted out janitors,” said MCTF Executive Director Lilia Garcia-Brower. “There are more than 4,000 janitorial companies who report employees in California, and there are more than 220,000 janitorial employees. As many as 50 percent of janitorial businesses operate underground, making the bidding process an increasingly hostile environment for law-abiding competitors.”
Starting in July 2018, janitorial companies will be required to register with the California Labor Commission. The state will maintain an online registry of janitorial companies. Client companies will be cited if they contract with an unregistered employer.
In other recent wage theft cases, a Southern California car wash mogul was cited for cheating 700 workers and destroying evidence at a dozen of his facilities in Orange, Los Angeles, San Bernardino and Ventura counties. And an Anaheim janitorial company servicing more than 80 major retail stores across Southern California was sued by the California Attorney General for paying its 150 workers just $400 a month over the past four years, far below the minimum wage.
The Cheesecake Factory locations investigated include:
- 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