Chipotle pays $1M in lost wages to current, former workers

The state Department of Labor has recovered $1 million in lost wages from fast-food chain Chipotle Mexican Grill Inc. for more than 20,000 of its workers statewide.

Chipotle, following an investigation by the Department of Labor’s Division of Labor Standards, was told to directly pay all active employees as well as provide funds to the state so it could pay former employees, according to state officials. 

Impacted workers received anywhere from $10 to more than $3,600 in unpaid wages, the state said.

Chipotle said it “voluntarily” paid $396,045 before the agency’s mandate. The company was required by the department to pay $584,062.99.

“These issues occurred due to inadvertent payroll programming errors,” a statement from Chipotle to Newsday said. “As part of our commitment to supporting and properly compensating our team members, we self-corrected and properly paid many of the impacted employees last year before the Labor Department told us to do so. We have implemented changes to our payroll system to prevent this from happening again.”

The investigation period was from May 2, 2022, through November 21, 2023. Chipotle was served notice of the violations in January. There was no criminal liability placed on the company.

An investigation into the chain was launched following a tip from the state Workers’ Compensation Board, which led to the discovery that the chain had not been paying the correct minimum wage rate for fast-food employees. Additional investigations led to a review of the company’s pay records from 2018 to 2022.

A subsequent complaint to the Department of Labor alleged the chain was not paying required wage rates, which led to a second audit of the company’s pay records from 2021 to 2023. Chipotle said the wage issue was due to a system error, the state said.

News of the Chipotle wage recovery comes as the state marks Gov. Kathy Hochul’s pledge two years ago to increase the state’s focus on wage theft.

New York has recovered more than $63 million in unpaid wages for more than 65,000 workers throughout the state over that time frame, state officials said.

“In the two years since I pledged to crack down on wage theft, we’ve put millions of dollars in hard-earned wages back in the pockets of hardworking New Yorkers,” Hochul said in a statement.

“Wage theft is stealing, plain and simple, and it does not only cheat workers out of a day’s pay — it violates our laws.”