The Century Foundation’s map of Carl’s Jr./Hardee’s Wage and Hour (WHD) and Occupation Safety and Health Administration (OSHA) investigations, published in January, demonstrated the extent of labor violations during Trump’s nominee for Labor Secretary Andy Puzder’s tenure as CEO of CKE Restaurants. Over 1,000 violations were found that resulted in over $150,000 in civil penalties and nearly $150,000 in back wages from 2000–2016. By state, violations were concentrated in the Midwest, Southeast, and West Coast, where many Carl’s Jr./Hardee’s stores are located. Alabama, Mississippi, Pennsylvania, Missouri, and Tennessee were the top five states with the most violations, ranging from sixty-six in Tennessee to 463 in Missouri. See the map below for details on violations, penalties, and back wages owed in each state. Map of WHD and OSHA Violations by State
Source: Department of Labor How Does DOL Investigate Wage & Hours and OSHA Cases?
With all of the news surrounding Mr. Puzder’s record, what can and cannot be inferred from the Department of Labor’s (DOL) data on labor violations at restaurants he ran?
OSHA inspections in the fast food industry are in almost all cases only initiated in the event of an injury or complaint. Unlike hazardous industries like mining or construction, where targeted and regular inspections occur, inspections in other industries are less likely to occur in food services. Data on inspections are publicly available once the investigation is opened.
WHD cases and the methodology of their investigations are more complicated. Investigation data are publicly available for cases that have been closed. Open cases are not included in the database.
The WHD investigations are also non-random. With 135 million workers and 7.3 million establishments across the United States under their jurisdiction, only a small share of establishments are investigated by the division. Over the last seven years, the Department of Labor has moved to a strategy of targeted enforcement in certain industries and geographies. Other investigations are complaint driven, but DOL can only investigate a small number of cases. Although the reasons for investigations are not publicly disclosed, many of the cases are initiated based on anonymous complaints. Other strategies, like targeted investigations of high-violation industries, may also motivate WHD investigation patterns. How Do Violations in the Fast Food Industry Measure Up?
Because DOL investigates so few restaurants (and has no way of investigating all establishments), total violations cannot be divided by the overall store locations in an industry or firm to yield a meaningful ratio. Studies have found that as many as 80 percent of fast food workers have experienced a wage and hour violation in their career.
The best way to look at DOL data is to determine how many investigations cumulatively warrant a violation. We can expect problem industries to have higher rates of uncovered violations. Combined with data on civil penalties, back wages owed and affected employees, this violation rate paints a picture of the state labor standards in an industry.
This rate can gauge compliance in relation to other establishments and industries. Based on this calculation,
fast food is a problem industry ( especially franchises ) relative to others in the United States, and Carl’s Jr./Hardee’s is representative of the broader issues in the industry.
Fast food is a problem industry relative to others in the United States, and Carl’s Jr./Hardee’s is representative of the broader issues in the industry.
According to an analysis from Bloomberg BNA , 60 percent of investigations of Carl’s Jr. and Hardee’s locations since 2009 found violations, while The Century Foundation’s analysis since 2004 found that 53 percent had violations. This may be a result of the increased investigation of high-violation industries from 2010 onward.
Either way, the CKE rate of 53 to 60 percent is unacceptably high. The only acceptable rate for the nation’s Secretary of Labor is zero.