The California Department of Industrial Relations has found the Cheesecake Factory and a janitorial contractor liable for $4.57 million in wage theft for underpaying janitors who worked the midnight to 8:00 AM shift in eight California locations of the Cheesecake Factory.
There are notorious practices in the janitorial service field in the way employees are treated, largely because of their work during the graveyard shift when inspectors and others cannot observe working conditions. The findings of the Department included the failure to give the janitors time for meals and their statutorily mandated breaks. In addition, the janitors were not permitted to leave work until an inspection had been conducted and their work was approved. In waiting for the inspections and approvals, the janitors often worked 10 hours but were paid for only eight. Christina Caron, "Cheesecake Factory Is Held Liable in Wage Theft Case," New York Times, June 13, 2...
One of the interesting things about the findings is the clear message by the California agency that companies cannot use contractors to distance themselves from bad labor practices. In this case, the Cheesecake Factory hired American Janitorial Services Corporation as its contractor. However, American Janitorial Services subcontracted with Magic Touch Commercial Cleaning. Magic Touch was then renamed Z's Commercial Quality Cleaning. The labor commissioner believes that the use of layers of contractors is a method used by companies to evade responsibility for the illegal labor practices. As a result, the Department found both the Cheesecake Factory and its contractor (s) liable. The case is one of the first to come before the Department based on a California law that allows for penalties on wage and hour violations (wage theft) to be assessed against both the owner of the premises being cleaned as well as the contractor they have hired.
Enforcement is not only difficult because of the significant layers of subcontractors and the graveyard shift hours but also because payments to employees tends to be in cash. Tracing the amounts paid is a challenge and building a case takes significant investigation efforts, including undercover operatives that infiltrate the janitorial industry.
What is the significance of the layers of subcontractors for janitorial services?
Why is the dual liability important?
What should companies like Cheesecake Factory do in order to avoid liability for wage theft?
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