California collects millions in stolen wages, but can’t find many workers to pay them

[October 04, 2024]  By JEANNE KUANG/CalMatters

Nearly a year after California settled a major wage theft case with The Cheesecake Factory, most of the money hasn’t reached the workers, underscoring the state’s challenges in helping employees get back pay.

Only 42 of the former janitors who worked for the restaurant chain’s contractors have received their cut of the settlement, a spokesperson for the Labor Commissioner’s Office said. More than 500 workers haven’t been found, leaving nearly $700,000 of the $1 million settlement unclaimed in state accounts.

Officials said the janitors were denied overtime pay and paid rest breaks at eight San Diego and Orange County restaurants, when workers hired by janitorial subcontractor Zulma Villegas were made to stay late by Cheesecake Factory managers.

The Labor Commissioner’s Office signed the settlement last October and announced it in January. Since then, it has issued social media posts asking workers to come forward, done a television interview on a Spanish-language channel in San Diego and maintained a hotline for workers. They’re asking janitors who worked at Cheesecake Factory restaurants in Brea, Irvine, Huntington Beach, Newport Beach, Mission Viejo, Escondido and San Diego between Aug. 31, 2014, and Aug. 31, 2017 to call [phone].

Alma Idelfonso said at the Escondido restaurant, her four-person team was assigned too much to clean in eight hours, forcing them to work as long as 10 or 12 hours. She did it without breaks, she said, and the chemicals she used to clean grease burned her chest.

“They told us, no, they weren’t going to pay five people,” she said in Spanish.

She received $20,000 in back wages earlier this year. It helped her buy a car, and support her sons financially. But it was little, she said, compared to what she believes she was owed.

“I worked sometimes 30 days in a row, I didn’t rest,” she said. “I feel like it was very little what we got. I feel like my coworkers also got little, because they got even less.”

Still, some of the unclaimed payments could be life-changing for a low-wage worker.

The amount each worker is eligible to claim depends on how many hours of unpaid work state investigators estimate they did during the three-year period they audited the employers’ payroll. Redacted records in the Cheesecake Factory case obtained by CalMatters show more than 100 workers are owed less than $50 each, but many others are eligible to claim thousands of dollars, with the highest payment being more than $35,000.

The settlement isn’t the only one where — even after the state secures payment from employers it has accused of wage theft — hundreds of thousands of dollars remain unclaimed.

The goal is to “ultimately get these monies back in the pockets of the affected workers, not just to win the settlements,” said Daniel Gaxiola, senior deputy labor commissioner.

In September, his office announced another settlement: $1.7 million against the owner of five Bakersfield Wingstop restaurants for alleged overtime violations. The office is asking as many as 550 workers to come forward and claim back pay.

There’s no deadline for workers to claim the money. But Gaxiola acknowledged in the Cheesecake Factory case, they are difficult to find. Low-wage workers — on whom the state focuses when it investigates labor violations — are often immigrants, and sometimes undocumented. They may have moved, he said, or might not even be in the U.S. anymore.

Time adds another challenge. The state cited the restaurant chain, its contractor Americlean and subcontractor Villegas in 2018, for a combined $4 million. It settled last fall for a quarter that amount, after a years-long administrative appeals process that was delayed in part by the COVID-19 pandemic. Now, the workers who are eligible for a payout cleaned the restaurants anywhere from seven to 10 years ago.

As part of the settlement, none of the companies admitted fault. But Americlean and Villegas both issued apologies to the workers and the restaurant chain agreed to monitor its janitorial contractors for two years.

The state has had a better track record on other settled cases, the office told CalMatters.

In a wage theft settlement announced in 2022 against the Adat Shalom residential care facilities in Los Angeles, the state has paid $1.8 million to 63 workers, while 86 workers who are owed more than $700,000 haven’t been found.

In a case against Ruby Rangoon restaurants in northern California that concluded in 2019, the state has paid $3.5 million to 238 workers. But nearly $400,000 remains unpaid to 141 others. In a $1 million settlement at the famed San Francisco restaurant Z&Y, all 22 workers involved are receiving their payments, according to the office.

Some cases conclude or settle faster than others, and employers have kept better records of their workers, Gaxiola said.

“We might have a different experience, where the employer didn’t maintain contact information or they didn’t do the required processes to maintain documented data for the workers, and then it makes our job a lot more difficult to establish contact,” he said.

Labor Commissioner’s Office spokesperson Charles Hamilton did not answer a CalMatters inquiry about whether the state, using payroll records it obtains during investigations, tries to contact eligible workers by phone.

“Privacy concerns are prioritized to prevent publicizing that certain workers may be receiving significant payments, which could expose them to unwanted attention and possible retaliation,” Hamilton wrote.

He wrote that officials send letters to workers using their last known address, but otherwise rely on media reports and community groups to get the word out to workers. In the Cheesecake Factory case, that’s the Maintenance Cooperation Trust Fund, a janitorial workers’ advocacy group that helped the state investigate the case.

The group has maintained its own hotline for the case but shut it down after six months. The fund’s executive director, Yardenna Aaron, said it helps spread the word by organizing janitors who develop personal relationships with fellow workers.

“Part of the specialty of our work and our casework … is our ability to keep our workers engaged no matter how short or how long the case takes,” Aaron said.

When workers do contact the state, the office does not track how they heard about the settlement, Gaxiola said. Instead, the focus is on verifying the person did work for the companies during the time the state investigated.

Idelfonso, who was among the workers who first reported the violations to Aaron’s group, took to social media to tell other workers there had been a settlement. She even tries to spread the word when she’s out at the store, keeping the hotline number handy.

She said though she found the settlement amount disappointing, she still would recommend fellow workers report violations for the chance to recover some back pay.

“That money did help me,” she said. “It is worth it to fight … so they understand that they can’t abuse people anymore.”

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CalMatters Capitol reporter Alexei Koseff contributed to this story.

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