Faced with a mounting labor shortage and high employee turnover, restaurant chains have earned plaudits for offering incentives to workers to stay in the job longer — tuition payments, bonuses, even a four-day workweek.
But the shortage of workers also appears to have had a darker effect: a steady drumbeat of labor violations by operators who have cut corners to keep their restaurants fully staffed.
In the latest example, Chipotle Mexican Grill was fined nearly $1.4 million on Monday over accusations that it routinely violated Massachusetts child labor laws, with the authorities estimating more than 13,000 violations from 2015 to 2019, the Massachusetts attorney general’s office said.
The authorities examined the records of six Chipotle locations across the state, finding that the chain regularly let dozens of 16- and 17-year-old employees work more than nine hours per day and more than 48 hours per week, in violation of state law, according to the Massachusetts attorney general. The authorities then used those findings to estimate that Chipotle had violated child labor laws 13,253 times across 50 locations in the state.
Chipotle is not the only offender. Child labor laws vary significantly from state to state, making it difficult for national retail and hospitality chains to monitor all the differences. And with unemployment at 3.5%, its lowest level in decades, chains across the United States are struggling to recruit low-wage workers, putting pressure on restaurant operators to break the rules, according to employment lawyers and restaurant industry experts.
“Understaffing is a massive problem,” said Jonathan Maze, the executive editor of Restaurant Business Magazine. “You have companies that are stressed to try to fill hours and keep people on, and it can lead to violations.”
In August, Qdoba, another fast-casual Mexican chain, was fined nearly half a million dollars by the Massachusetts attorney general for more than 1,000 breaches of child-labor laws. And last week, the federal government fined a Wendy’s operator with restaurants in nine states for allowing minors to work outside normal business hours. In recent years, a McDonald’s operator in Michigan and a Burger King franchisee in Massachusetts have also had to pay fines for breaching child-labor rules.
Still, the Chipotle case was striking in its sweep. The attorney general’s office said it was the biggest child labor case in state history. And the sheer number of estimated violations was unusual, said Patricia Smith, senior counsel at the National Employment Law Project and a former solicitor of the U.S. Department of Labor.
“That’s a pattern,” she said. “That’s not an occasional slip through the cracks.”
In addition to the child labor violations, Chipotle was cited for breaching sick-time rules and failing to make timely wage payments, the authorities said. As part of the settlement, Chipotle will pay $500,000 to train young workers and fund education and oversight programs about child labor, bringing the total cost to around $2 million.
In agreeing to the settlement, Chipotle did not admit to the thousands of violations. The chain’s chief corporate reputation officer, Laurie Schalow, said in a statement Tuesday that Chipotle was “committed to ensuring that our restaurants are in full compliance with all laws and regulations.”
“We believe that in hiring workers beginning at age 16, we can provide younger employees with valuable experiences and provide a compelling work environment,” Schalow said.
Over the years, Chipotle has been heralded for its “food with integrity” mantra and its paid sick-leave policy. Like many restaurants, however, the company has struggled with turnover. In a bid to keep employees at the chain longer, Chipotle pledged in October to cover upfront the tuition costs of certain business and technology degrees for employees who have worked at the company for at least 120 days.
Chipotle has also come under fire for how it treats employees. In September, New York City sued the chain under the Fair Workweek Law, alleging that staff members were forced to work unpredictable schedules. The Massachusetts investigation began after a parent complained that a child had worked past midnight at one Chipotle restaurant in Beverly, Massachusetts.
The Massachusetts attorney general, Maura Healey, noted in a news release that Chipotle employed thousands of young people across the country.
“It has a duty to ensure minors are safe working in its restaurants,” she said Monday. “We hope these citations send a message to other fast-food chains and restaurants that they cannot violate our child labor laws and put young people at risk.”
The tight labor market has led to staffing shortages across a variety of industries, including farming and construction. A few factors specific to the restaurant industry have made the problem especially acute for fast-food chains: The number of teenagers in the workforce has steadily declined, and Wall Street investment has led to a glut of restaurant openings, oversaturating the market.
Still, the current worker shortage is not the first time that restaurant operators have violated labor rules.
“In good times or bad times, it’s always easier to get a little bit more on the backs of the employees,” said Brian Heller, an employment lawyer in New York. “When you have a business that’s based on employees doing low-level work, it can be easy to ignore the laws that are there to protect people.”