LOUISVILLE, Ky. – Krispy Kreme has agreed to pay nearly $1.2 million in back wages and damages to 516 workers to settle overtime pay violations, the U.S. Department of Labor announced Thursday.
According to a news release, the agency said Krispy Kreme Doughnut Corp. will pay $1,187,757.69 in back wages and liquidated damages to the workers, who were employed in multiple locations.
In a complaint filed in U.S. District Court on Nov. 7, the department alleged that the national doughnut chain had not calculated overtime properly for its district managers over the past three years and failed to include monthly bonuses in some employees’ regular rates of pay, USA Today reported. That resulted in overtime paid at rates lower than permitted by law, the Labor Department alleged.
One-half of the settlement will be paid as back wages and the remainder will be paid as damages, according to a Nov. 7 injunction in the United States District Court for the Western Court of Kentucky obtained by the Winston-Salem Journal.
The labor department’s Wage and Hour Division opened an investigation at a Krispy Kreme in Louisville, Kentucky, according to The Associated Press. The probe soon expanded to include all 242 of the chain’s locations in the U.S.
The department “soon determined violations found there were widespread and systemic,” according to its news release.
“Overtime and minimum wage violations are common violations found in food service industry investigations,” Jessica Looman, the Wage and Hour Division’s principal deputy administrator, said in a statement. “Employers who fail in their obligation to pay minimum wage and overtime wages as the law requires make it harder for workers and their families to make ends meet. The Wage and Hour Division works diligently to inform employers of their obligations and protect the workplace rights of food service workers.”
In a statement provided to the AP, Krispy Kreme said it did not agree with the labor department’s findings but said it would settle the case without admitting any wrongdoing.
Krispy Kreme, which began operations in 1937 and has its headquarters in Charlotte, North Carolina, employs approximately 9,200 workers in the U.S., according to the AP.
