🗞️ Special Delivery: Little Caesars Pays $409K in Back Wages

The U.S. Department of Labor's Wage and Hour Division announced on February 25, 2026, that it had reached a settlement with MG Fast Food Inc., the franchise operator of a Little Caesars restaurant in Redwood City, California, requiring the company to pay $409,457 in back wages to 32 workers.

An investigation covering May 2022 through May 2025 found that MG Fast Food Inc. violated the minimum wage and overtime provisions of the Fair Labor Standards Act (FLSA). Specifically, the employer paid straight-time rates for all hours worked rather than the legally required time-and-one-half rate for hours exceeding 40 in a workweek. Investigators also found that some employees were not compensated for all hours worked, resulting in minimum wage violations. Compounding those violations, the employer maintained inaccurate payroll records — with discrepancies between timesheet totals and payroll data — that directly affected overtime computations, constituting additional FLSA recordkeeping violations.

The case is part of a broader pattern of WHD enforcement actions against Little Caesars franchise operators. Prior investigations have resulted in civil penalties against franchisees in Tennessee for child labor violations and in Michigan for allowing minors to operate hazardous equipment, underscoring persistent compliance gaps across the franchise system.

Under the current WHD enforcement posture established by Field Assistance Bulletin 2025-3, the agency is prohibited from seeking liquidated damages in pre-litigation administrative settlements — a policy change that took effect June 27, 2025. Had liquidated damages been available and pursued, the total recovery could have approached $818,000. The settlement as structured covers back wages only.

The settlement amount — approximately $12,795 per affected worker — reflects a three-year violation period. Workers can check whether they are owed back wages collected by the division through the WHD's online back wage search tool. Employers seeking to avoid similar enforcement actions may use the agency's PAID self-reporting program to voluntarily resolve potential FLSA violations before a formal investigation.

A note on the applicable minimum wage: California's statewide minimum wage applies to most employers, but Little Caesars qualifies as a covered fast food chain under California AB 1228, which set a $20/hour minimum wage for fast food restaurant employees at national chains of 60 or more locations, effective April 1, 2024. The investigation covers May 2022 through May 2025, meaning roughly the first 23 months of the violation period fall under the statewide rate then in effect, while the final approximately 13 months fall under the higher $20/hour fast food rate. The back wage calculation in the settlement would reflect whichever rate applied at the time of each underpayment.

Key Points

• MG Fast Food Inc., a Little Caesars franchise operator in Redwood City, CA, agreed to pay $409,457 in back wages to 32 workers to settle FLSA violations.
• Violations spanned May 2022 to May 2025 and included failure to pay overtime at time-and-one-half, failure to pay for all hours worked, and recordkeeping discrepancies.
• The WHD's current policy (FAB 2025-3) bars agency pursuit of liquidated damages in administrative settlements, limiting recovery to back wages only — potentially leaving an equivalent sum unrecovered.
• The action reflects a recurring pattern of DOL enforcement against Little Caesars franchisees across multiple states and violation types.
• California's fast food minimum wage ($20/hour under AB 1228, effective April 1, 2024) applies to covered Little Caesars employees for the final portion of the violation period. The statewide general minimum wage governed the earlier portion, meaning the applicable rate varied across the three-year investigation window.

Primary Source Author: Wage and Hour Division, U.S. Department of Labor

Primary Source: Wage and Hour Division, U.S. Department of Labor

Primary Source Link: https://www.dol.gov/newsroom/releases/whd/whd20260225-0

Supplemental Links

• Fair Labor Standards Act — Full Text & Overview (DOL)
• WHD Back Wage Recovery Methods — FLSA Advisor (DOL elaws)
• Congressional Research Service — The FLSA: An Overview (R42713)
• DOL Field Assistance Bulletin 2025-3 — Liquidated Damages Policy
• Morgan Lewis — DOL Rolls Back Biden-Era FLSA Practices (July 2025)
• HR Dive — DOL Fines 7 Little Caesars Franchises $161K for Child Labor Violations
• California DLSE — Division of Labor Standards Enforcement
• California DLSE — Fast Food Minimum Wage FAQ (AB 1228)
• WHD PAID Self-Reporting Program
• WHD Back Wage Search Tool