DOL Finds Wage and Hour Violations: Pizza Company Pays $409K

A Little Caesars franchisee will pay $409,457 for federal wage and hour violations, the Department of Labor (DOL) recently announced.

The case shows how payroll mistakes can turn into expensive liabilities when overtime calculations and recordkeeping controls fall short.

Wage and Hour Violations Trigger Six-Figure Settlement

According to an investigation by the DOL’s Wage and Hour Division, franchise operator MG Fast Food Inc. violated minimum wage and overtime provisions of the Fair Labor Standards Act (FLSA). 

Federal investigators found that 32 workers at a Little Caesars in Redwood City, CA, were not properly paid. Specifically, the employer: 

• Paid straight time to employees who worked more than 40 hours in a workweek instead of overtime premiums, and
• Failed to compensate some employees for all hours worked, resulting in minimum wage violations.

Further, the investigation also determined that the employer failed to keep accurate payroll records in violation of FLSA recordkeeping procedures. Discrepancies between timesheet totals and payroll records affected overtime calculations, according to DOL.

Under the settlement agreement, the company will pay $409,457 in back wages to 32 affected workers – an average of nearly $12,800 per employee. 

“All workers must be paid for every hour they work, including overtime premiums when they work more than 40 hours in a workweek,” said Michael Eastwood, Wage and Hour Division Acting District Director in San Jose, California.

This is not the first enforcement action involving the brand. In 2022, the DOL investigated seven Little Caesars locations in Tennessee. Investigators found minimum wage and overtime violations, as well as violations of child labor law. The agency recovered $1,625 in back wages for 21 workers and assessed a $161,050 civil penalty for the child labor violations.

More recently, in January 2025, the DOL cited a Little Caesars franchisee in Farmington Hills, MI, for violating child labor provisions of the FLSA. Investigators found that a minor under 16 operated a pizza oven and dough mixer and that three 15-year-olds worked past 7 p.m. on school nights. The agency assessed $26,341 in civil penalties.  

HR Takeaways

For HR leaders, this settlement is a reminder that wage and hour compliance starts with the basics. Employers must ensure employees are paid for every hour worked, that overtime premiums are calculated correctly, and that payroll records accurately reflect time worked. When those fundamentals break down, investigations and liability often follow.

• Track and pay for all hours worked. In this case, inconsistent timekeeping led to unpaid hours (minimum wage violations) and straight-time overtime pay (OT shortfalls) for 32 workers.
• Pay overtime correctly. That’s at time and a half for hours worked over 40 in a workweek. Paying straight time instead of time and a half violates the FLSA.
• Ensure payroll records match time records. Discrepancies can trigger violations and complicate overtime calculations.
• Avoid repeat violations. They indicate systemic gaps. The DOL probed this franchisee for overtime and minimum wage issues, and prior cases at other locations revealed similar wage and child labor violations.