Krispy Kreme to pay workers over $1 million for ‘widespread’ labor law violations
Krispy Kreme will pay nearly $1.2 million to hundreds of workers after the company violated federal overtime laws at several stores, according to federal labor department officials.
The Charlotte-based doughnut king and coffee shop agreed to pay back wages and liquidated damages to 516 workers for the overtime violations, the U.S. Department of Labor said in a news release Thursday.
Amounts due to each employee listed in court documents range from over $100 to nearly $14,000.
What began as an investigation at one Krispy Kreme store in Louisville, Kentucky, led the department’s Wage and Hour Division to expand its probe to all 242 stores nationwide. The labor law violations were “widespread and systemic,” the agency said.
Krispy Kreme failed to include monthly bonuses in some employees’ regular rates of pay, investigators said. “By doing so, the employer paid overtime at lower rates than the Fair Labor Standards Act requires,” the agency said. The Labor Department did not initially identify the stores where the violations occurred.
Krispy Kreme is committed to paying its workers fairly and in accordance with applicable laws, the company said in a statement to The Charlotte Observer Thursday afternoon.
“We do not agree with the department’s findings and the basis for them,” the company said. “However, we have agreed to settle this matter with no admission of wrong-doing in the best interests of our business and our team members.”
About the Krispy Kreme complaint
On Nov. 7, the Labor Department filed a complaint listing the violations and a settlement order in the U.S. District Court for the Western District of Kentucky. As part of the court order, Krispy Kreme agreed to future compliance with the overtime provision.
Krispy Kreme must issue payroll checks or checks to the last known addresses for all employees within 45 days from the court filing on Nov. 7, documents show.
Overtime and minimum wage violations are common violations found in food service industry investigations, said Principal Deputy Wage and Hour Administrator Jessica Looman 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,” Looman said.
About Krispy Kreme
Krispy Kreme Doughnut Corp., founded in 1937, has about 9,200 workers nationwide.
In 2019, the company moved its headquarters and test kitchen from Winston-Salem to Charlotte’s South End at 2116 Hawkins St.
In June, Krispy Kreme entered another sweet treat category — soft serve ice cream — in 10 U.S. markets, including all Charlotte-area stores, The Charlotte Observer reported.
Last month, Krispy Kreme closed production in Iowa, resulting in 80 layoffs, to shift to doughnut factories in Winston Salem and Concord.
On Tuesday, Krispy Kreme reported its net revenue grew 10.1% in the third-quarter that ended on Oct. 2 to $377.5 million compared to the same time last year. The publicly-traded chain operates in over 30 countries, with expansion plans in Chile, Costa Rica, Jordan and Switzerland.
This story was originally published November 17, 2022 at 12:30 PM with the headline "Krispy Kreme to pay workers over $1 million for ‘widespread’ labor law violations."