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Franchise owner agrees to reimburse employees for wage theft

On Behalf of | Sep 16, 2020 | Employment Law |

Minimum wage orders and ordinances can overlap in confusing and misleading ways in greater Los Angeles. The state of California imposes a minimum wage ordinance that requires employees to be paid a minimum of $12 per hour if the business has fewer than 25 workers and $13 an hour if the business has 26 or more employees.

In the unincorporated areas of Los Angeles County, the minimum wage for the smaller businesses is $14.25 and $15 for the larger businesses. Three franchisors recently agreed to pay almost $500,000 to employees who did not receive the mandatory minimum wage.

The investigation and settlement

Investigators for the Los Angeles County of Consumer and Business Affairs citied three Southern California companies for underpaying workers at Original Tommy’s Hamburgers and Pizza Hut stores.

Two companies, Tomdan Enterprises, Inc. and Koulax Enterprises, which jointly operate businesses under the name of Original Tommy’s, were alleged to have underpaid 96 low wage workers over a period of three years. After negotiating with county investigators, the two companies agreed to pay $147,775 in back wages to employees at these two companies and a fine of $147,000 to the county. Management said that they were unaware that two of its stores were in unincorporated areas of Los Angeles County. The company said that it immediately rectified its error by making payments of back wages to eligible workers.

A third Pizza Hut franchisee, Southern California Pizza Company was cited for violations at six Pizza Hut locations that amounted to $19,002 in back wages for 36 low-wage employees. The company agreed to pay the back wages it owed and fines in the amount of $60,000.


The enforcement of the minimum wage law by Los Angeles is a hopeful sign for all low-wage workers. The acknowledgement of the missing back pay and the payment of significant fines should be a signal to other employers about their obligation to adhere to the minimum wage laws. Anyone who believes that they are being paid less than the amounts prescribed by the minimum wage laws may wish to consult an experienced employment law attorney for advice on available remedies.