NEW YORK CITY — The New York attorney general’s office is suing Domino’s Pizza, claiming it is liable for wage theft by franchisees because the company used a computer system that it knew undercalculated workers’ pay.
The lawsuit, announced by New York attorney general Eric Schneiderman in late May, alleges three Domino’s Pizza franchises, along with their corporate parent Domino’s LLC, committed “rampant wage violations” by failing to pay workers proper wages and reimbursements.
“We’ve discovered that Domino’s headquarters was intensely involved in store operations and even caused many of these violations,” Schneiderman said in a statement.
According to the complaint, 10 New York locations knowingly used flawed payroll software to calculate earnings for employees even though they knew the company’s PULSE system did not work properly.
Accusations against Domino’s include:
- Failing to pay state minimum wage
- Withholding overtime pay
- Abuses of tip credits
- Refusal to pay reimbursement for gas and other transportation
The lawsuit claims Domino’s Pizza, the nation’s largest pizza chain, underpaid its workers at the 10 New York restaurants by $565,000.
The lawsuit marks the latest overtime wage lawsuit against the company, which recently settled a slew of other violations in New York for $1.5 million.
Can Corporations Be Held Responsible for Overtime Claims Against Franchises?
State prosecutors chose to hold Domino’s LLC, not just the three franchises, responsible in the unpaid overtime lawsuit because it believed Domino’s an intricate role in the hiring, firing, training, and supervision of the employees at the suspected locations.
Under state and federal laws, entities usually can only be added to an overtime suit if they exercise some sort of employment control over the harmed employee.
Furthermore, the lawsuit claims Domino’s actively encouraged franchisees to use the the PULSE payroll system even though it was known since 2007 to be flawed and despite the fact that numerous system updates did not correct the issue.
A corporate spokesperson for Domino’s claims the lawsuit will make it harder for small business to utilize the franchise model as a means to earn a living and plans to support its franchise owners throughout the ordeal.
The New York attorney general’s office has collected over $26 million in unpaid wages for 20,000 employees across the state. That number includes a settlement from a Papa John’s franchise owner in The Bronx who eventually served jail time for his involvement in an unpaid wage scheme to defraud his employees.
Restaurant Overtime Lawsuits
Call (855) 754-2795 or complete the Free Unpaid Overtime Case Review form on the top right of this page if you feel that you and and other employees believe that your wage rights are being violated under the FLSA. Our top-rated team of unpaid wage lawyers will evaluate your situation to determine your best course of action to help you seek justice.
Our office will also determine if it is in your best interest to file a lawsuit against your employer. Because strict time limitations apply for filing these types of claims, we advise you contact our experienced unpaid overtime wage attorneys at your earliest convenience and preserve your legal rights.