Chipotle has been sued by New York City over claims it violated scheduling sick leave laws, and now owes over $150 million to workers

mmeisenzahl@businessinsider.com (Mary Meisenzahl) 

© Kris Mirasola West 169th Street Chipotle. Kris Mirasola

New York City is suing Chipotle over accusations of violating labor laws.

The complaint says Chipotle owes workers more than $150 million.

Chipotle called the case a "dramatic overreach."

New York City has sued Chipotle, accusing the restaurant chain of labor law violations regarding workers' schedules at dozens of stores, the New York Times reported Wednesday.

The city is accusing Chipotle of hundreds of thousands of violations of the Fair Workweek Law, which mandates that workers must have 14 day advance notice of schedules or extra pay, and that workers must have a certain break period between shifts or receive an extra $100, Noam Scheiber at The New York Times first reported.

Chipotle failed to give New York City workers sufficient notice or extra pay, the Times said, citing the complaint. The Department of Consumer and Worker Protection at the Office of Administrative Trials and Hearing officially filed the suit.

Chipotle confirmed to Insider that the city had filed the suit.

"We make it a practice to not comment on litigation and will not do so in this case, except to say the proceeding filed today by DCWP is a dramatic overreach and Chipotle will vigorously defend itself. Chipotle remains committed to its employees and their right to a fair, just, and humane work environment that provides opportunities to all," Laurie Schalow, Chief Corporate Affairs Officer for the company, told Insider in a statement.

This complaint is the largest ever brought by New York City under the Fair Workweek law, according to the Times. Workers are owed more than $150 million for the violations, plus more in legal penalties, the Times reported.

The lawsuit is over labor practices between November 2017 and September 2019. It says that Chipotle has attempted to comply with the law since 2019 but violations are ongoing.

"Since we first filed our case against Chipotle, we have unfortunately learned that those initial charges were just the tip of the iceberg," department commissioner Lorelei Salas said in a statement.

The lawsuit also accuses Chipotle of illegally denying requests for time off or not paying them for time that they took, a violation of New York City's paid sick leave law, the Times reported. All of the 6,500 Chipotle employees in New York City were affected by scheduling and sick leave violations, according to the complaint.

Chipotle continues to expand even as COVID hit the restaurant industry hard. In the first quarter of 2021, the chain opened 35 net locations, and digital sales exploded with 133% growth. Chipotle attributed much of its growth to Chipotlanes, the fast casual chain's version of drive-thrus. More than half of the new Chipotle locations had drive-thrus this quarter, and the company says they "perform very well and are helping enhance guest access and convenience, as well as increase new restaurant sales, margins, and returns."