Dive Brief:
- Krispy Kreme will pay more than $1.1 million to 516 workers in a settlement after the U.S. Department of Labor accused the company of underpaying workers for overtime, the DOL said in a statement Thursday.
- The DOL alleged Krispy Kreme’s overtime violations were “widespread and systematic,” and consisted of a failure to include monthly bonuses in some worker’s rates of pay, which meant the company was not paying workers adequate overtime.
- In a statement emailed to Restaurant Dive, Krispy Kreme said it did not agree with the DOL’s findings, or the basis of the findings, and agreed to the settlement without admitting any wrongdoing.
Dive Insight:
DOL’s investigation of Krispy Kreme’s overtime compensation began with a single location in Kentucky, before expanding to all 242 locations operated by the chain in the United States, according to the DOL press release.
The doughnut chain said the settlement, without an admission of wrong, was “in the best interests of our business and our team members.” Krispy Kreme wrote in a statement that it abides by all applicable laws and pays workers for all hours worked.
Overtime violations are a common form of wage theft in the service industry, according to the DOL. The department has pursued settlements with a number of restaurants over wage and hour violations in recent months. DOL exacted a $230,000 settlement from an Austin, Texas, restaurant in a tip sharing case in September. The department levied $195,000 in fines on two Boston restaurants for overtime and minimum wage violations in October, and fined seven Little Caesars franchisees for child labor violations earlier in the summer.
Other regulatory bodies, especially in New York City, have taken aim at restaurant labor practices recently. New York City obtained a $20 million settlement from Chipotle in August after the chain allegedly violated the city’s laws about scheduling. Many wage and hours settlements include a provision stating the employer does not admit to any wrongdoing.
