Jack in the Box Cited $903,084 for Misclassifying Managers

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Posted by: CEA's HR Advisor Team on Monday, September 11, 2017 at 12:00:00 am

The California Labor Commissioner’s Office cited a Jack in the Box franchise operator $903,084 for misclassifying 40 managers as exempt and denying them overtime pay. That’s right nearly one million dollars – ouch!

Nor-Cal Venture Group, Inc. owns 26 Jack in the Box franchises in California, most of which are in the greater Sacramento area. The Labor Commissioner’s Office opened an investigation after receiving a complaint and found that 40 employees were misclassified as salaried exempt managers. As managers, they were required to work a minimum of 45 hours per week with no overtime.

Managers who spend less than half of their work time on managerial duties must be paid overtime. Investigators determined that the 40 workers were performing the same duties as other employees.

The citations issued to Nor-Cal Venture Group, Inc. include $416,783 in unpaid overtime wages and penalties, $218,227 in minimum wage violations and penalties, $169,427 in liquidated damages and $98,647 in waiting time penalties for 16 of the workers, who were not paid properly at the conclusion of their employment.

Worker misclassification results in an estimated loss of $7 billion each year in payroll tax revenue to the state. Don’t let your company be included in next year’s statistics or stick your head in the sand.  

Ask CEA to come on site and complete an HR Checkup for your business.  It’s quick and easy and will give you the peace of mind of knowing you are in compliance with California wage and hour laws.

Source: State of California Department of Industrial Relations, News Release No. 2017-74, August 9, 2017, http://www.dir.ca.gov/DIRNews/2017/2017-74.pdf.

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