Burrito Factory in San Jose settles wage theft claims for $1 million

A Mexican burrito chain that’s been part of the San Jose dining scene for more than 20 years has agreed to pay a $1 million settlement over wage theft complaints from at least 239 employees, the Department of Industrial Relations announced on Monday.

The restaurant Burrito Factory has four locations across San Jose, and came under investigation by the California Labor Commissioner’s Office in 2017 after workers filed a complaint stating their salaries paid less than minimum wage — even after overtime and split shifts.

Burrito Factory also violated other labor codes, the agency said, often paying workers under the table in cash, denying mandated meal breaks and failing to maintain accurate payroll accounts. Burrito Factory officials could not be reached for comment.

“The message is clear: compliance with labor standards in California is not optional,” said California Labor Secretary Julie A. Su, who runs the Commissioner’s Office, in a news release. “When workers who are not paid come forward and demand their just day’s pay, the state is on their side.”

The Burrito Factory case is one of many investigations that the Labor Commissioner’s office has pursued, said Su, who launched the ‘Wage Theft is A Crime’ campaign to combat wage theft and better enforce the state’s labor laws. The multilingual public awareness campaign also strives to educate workers on their rights, how to recover back wages and where to report a labor code violation.

The announcement came weeks after county officials cracked down on wage theft and other workplace mistreatments by adding additional funding to the Santa Clara County’s Office of Labor Standards Enforcement and expanding the wage theft policy to construction workers. San Jose also recently discussed expanding its wage theft policy to include the construction industry and lawmakers on Tuesday voted against banking with Chase after it disclosed wage theft violations.

Employees will begin receiving lost wages in July, in addition to $100,000 in fees that the restaurant owes in civil penalties.

Contact Nadia Lopez at nadia@sanjosespotlight.com or follow @n_llopez on Twitter.

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