NEW YORK — A Papa John’s International Inc. franchisee is facing a $2.1 million lawsuit for six years of alleged underpayment of its delivery workers at its four Harlem locations. The New York Attorney General, Eric Schneiderman, brought the lawsuit against New Majority Holdings LLC and Ronald Johnson, its owner, in mid-October for violation of New York State Labor Law. According to the AG’s lawsuit, the franchisee “shaved” the hours of around 400 delivery workers’ and failed to pay earned overtime wages.
The Investigation & Findings
In May 2013, after receiving complaints from delivery workers, the attorney general’s office began investigating the franchisee and its payroll practices. The investigators reviewed payroll records and interviewed a number of people, including Ronald Johnson. Based on the payroll records, New Majority Holdings’ violations were found to date back to October 2008. In fact, according to the lawsuit, both the records and testimony from depositions revealed two sets of payroll records and an intentional and systematic violation of state labor law.
New Majority Holdings regularly rounded down the delivery workers’ hours and failed to calculate overtime on the typical 40-hour week. Compounding the problems with rounding down the employees’ hours, the franchisee was paying as little as $5 an hour, despite the state and federal minimum wage being $7.25 at the time. The $5 per hour is also less than the state’s minimum wage for tipped employees, which essentially eliminates any defenses the franchisee may have had with its pay practices.
In addition to the wage and overtime claims, the franchisee required delivery workers to purchase their own bicycles and other work-related equipment, which was estimated to cost as much as $500 each year for each employee. New York law requires employers to either provide or reimburse employees for work-related gear. Based on the AG’s calculations, New Majority Holdings and Johnson are liable for roughly $1 million for underpayment and nearly $2.1 million in total, including liquidated damages and prejudgment interest.
Overtime Investigations
Usually the first step in addressing a wage or overtime violation, if attempts at resolving the problem within the company have failed, is to file a complaint with either the state or federal department of labor. These complaints should lead to an investigation of the situation. Investigations often consist of the review of documents and depositions, or interviews under oath. Depending on what the investigation reveals, an employee may gain the right to sue their employer or the state or federal government may decide to take over the litigation.
In many cases, having a well-crafted and specific complaint can greatly increase the effectiveness of overtime investigations. Our knowledgeable team of overtime pay lawyers can evaluate your claim and discuss your rights. Contact our experienced team of overtime pay lawyers today at (855) 754-2795. If you gain the right to bring a lawsuit, and we accept your case, we will represent you under our No Fee Promise. This means there are no legal fees or costs unless you receive a settlement.