Krispy Kreme Inc (DNUT.O) agreed to pay $1.19 million to settle U.S. Department of Labor charges it failed to properly pay overtime to several hundred workers, the agency said on Thursday.
The donut chain was accused of violating the federal Fair Labor Standards Act when, beginning around November 2019, it stopped including bonuses in the pay of assistant general managers when calculating overtime.
Payments will go to 516 workers, in amounts ranging from about $100 to nearly $14,000, according to a filing in the federal court in Louisville, Kentucky.
The Labor Department said its Wage and Hour Division first began examining a single Krispy Kreme location in Louisville.
Upon uncovering “widespread and systemic” violations, the probe expanded to the Charlotte, North Carolina-based company’s 242 locations nationwide, the agency said.
Half of the $1.19 million payout represents back wages and half represents damages. Krispy Kreme employs about 9,200 people across the United States.
In a statement, Krispy Kreme said it did not agree with the Labor Department findings, but agreed to settle without admitting wrongdoing.
It also said it was “strongly committed” to paying workers fairly and in compliance with applicable laws.