Tales of the California business climate

by Walter Olson on July 20, 2011

The CEO of the Carl’s restaurant chain “said he’s had to fire managers who insisted on working more hours than state allows.” [David Houston and Jot Condie, San Jose Mercury-News]

{ 11 comments }

1 J.T. Wenting 07.20.11 at 2:38 am

Most managers with a heart for their business would solve that by simply not reporting those hours… Of course if there’s union thugs among the workforce they get ratted out to the Obamistas and you’re toast anyway, another reason to not set up shop in a unionised area.

2 tim maguire 07.20.11 at 6:24 am

Chain restaurants tend to be labor intensive for management. Is it even possible to get the job done in the state mandated number of hours? (If so, then maybe those managers should have been replaced?)

3 Bob Neal 07.20.11 at 7:08 am

The issue is the “head and hands” rule in California. Even though these managers are responsible for a multi-million dollar business and supervise the entirety of the location, becuase they also work with those they supervise, they cannot be exempted from OT (unlike every other jurisdiction in the country). So, these managers have to take a paid break before their 5th hour of work (or be offered one – it’s an open question before the California Supreme Court), and can’t work for than 8 hours in a day. So, even though these managers want to oversee their restaurants, they can’t. Even more troubling is that they can’t be available to provide direction by phone unless they clock in for the time they consulted their employees by phone, or e-mail. A businessperson would be out of their minds to open a business in California these days.

4 Walter Olson 07.20.11 at 10:48 am

Sorry, some sort of paywall device seems to have swallowed the link to the San Jose paper.

5 Patrick Paulson 07.20.11 at 11:49 am

For what it’s worth if you exclude the ?nclick_check=1 from the link it seems to load fine for me.

http://www.mercurynews.com/opinion/ci_18140563

6 DensityDuck 07.20.11 at 3:03 pm

Yeah, every now and then the conglomerate chain that owns the SJ Mercury decides that it needs to spam more people. It’s nothing that some judicious deleting in the URL won’t fix.

Anyway. Amusing how the article doesn’t mention the recent litigation against Carl’s Jr. See, they’d decided to institute this little arrangement where they charged customers extra if they wanted to pay by credit card. Both card-company regulations and California law say this isn’t allowed; Carl’s Jr tried to get around that by calling it a “service fee” and then refunding it for customers who paid cash. A few lawsuits sorted that out.

So this isn’t so much about “oh woe, California is soooooo expensive” and more like Carl’s Jr. being butthurt that they couldn’t squeeze their customers.

7 CTrees 07.21.11 at 7:46 am

Bob: I don’t believe you’re entirely correct. I worked as an hourly employee at a Target in CA for quite awhile. While we did have to take a break before our fifth continuous hour (MANY people were fired for clocking out slightly after their fifth hour), there wasn’t an upper limit to the number of hours we could work in a day. A few times I did over sixteen hours (with delicious overtime), as did many of my coworkers, both hourly and salaried. Target, at least in my district, was extremely proactive about not being fined for violating labor laws, going so far as to pay people out of the registers if there was an issue with when they’d recieve pay checks.

Can you cite sources for an eight hour per day maximum workload?

8 Aufero 07.21.11 at 12:50 pm

Having worked for the fast food chain in question in the past, I’m extremely dubious of any claim about excessive regulation put forth by upper management at CKE. Standard company practice is (or at least was when I was working there a couple of decades ago) to require more of employees than can actually be accomplished in their scheduled hours, then downgrade store managers for any time overage. That way when they need an excuse to get rid of someone, they always have one handy – either more hours were worked than were allowed, or procedures weren’t followed to the letter.

Based on my experience, the claim that they’ve fired people solely for working more hours than allowed by law is both unsurprising and unbelievable.

9 Mike 07.21.11 at 6:59 pm

There is no law in CA against overtime. But non-exempt employees must be paid for their overtime. CKE is clearly trying to limit overtime, so “managers” must get 10 hours of work done in 8 hours.
Companies must INSIST all employees follow wage and hour rules in CA otherwise the company takes the fall. Employees CANNOT volunteer to stay late for free.

10 Bob Neal 07.22.11 at 9:12 am

Mike beat me to it. There is no prohibition against working more than 8 hours in California, but it kicks in daily OT. More than 12 and it’s double-time.

11 Melvin H. 07.22.11 at 2:35 pm

DensityDuck (and everyone): Have you heard of some places that advertise a discount for using cash? (Some places here did that–within the last three years at the latest–but none that I’ve heard of recently.)
None of those places were hit with fines or anything similar; but I wonder what is the (legal) difference between discounting for paying cash, and charging a “service fee” for using a credit/debit card.

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