The owner of five Wingstop units in California has been ordered to pay more than $3.2 million for wage theft violations after setting up each restaurant as a separate entity, making it look like each was a different employer.
The operator Clinton Lewis created corporate entities for each of his Kern County restaurants, and by doing so deprived workers from receiving a higher minimum wage and overtime pay if they worked at more than one location. Those workers also missed meal premiums, the California Labor Commissioner said last week.
An estimated 551 workers were impacted by the way Lewis structured the companies, the commissioner’s office said.
“This case highlights abuses that take place in low-wage industries such as franchised fast-food restaurants where separate corporate entities are created by the same employer to improperly lower labor costs,” said Labor Commissioner Lilia Garcia-Brower, in a statement. “The law is clear that such corporate schemes undercut law-abiding employers and circumvent worker protections.”
State officials began investigating the franchisee in late 2020 after receiving a report about labor law violations at one of the units.
Investigators found that, between 2019 and 2022, Lewis owned and operated the five units and sometimes shared workers between the multiple locations. But those workers were earning a lower minimum wage assigned to employers with 25 or fewer employees—though they should have been earning a higher wage for employers of 26 or more.
Similarly, employees who worked for eight hours at one unit and move to another for another shift were not paid overtime. And Lewis avoided the missed-meal-break premiums by scheduling workers at more than one location, the Commissioner’s office said. Those employees also were not paid for the time spent traveling from one worksite to another, as would be required under one employer.
The citations were issued to Hot Wing Holdings Group Inc.; The Northwest Bakersfield Wing Company Inc.; The East Bakersfield Wing Company Inc.; The Bakersfield Wing Company Inc.; The Southeast Bakersfield Wing Company Inc.; and Clinton Lewis dba Wingstop.
The citations included $190,741 in minimum wage violations, $4,323 for contract wages, $57,312 for overtime, $87,656 for meal premiums, $238,569 for liquidated damages and $1,307,980 for waiting time penalties for a total of $1,886,581.
The citations also include $77,124 in interest, and the separate companies and Lewis were also jointly liable for civil penalties totaling $1.2 million.
Dallas-based Wingstop in a statement said, "The locations mentioned are franchise locations. We require all Wingstop franchisees to comply with local laws and regulations."
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