NEW YORK — In the latest in a string of wage suits against Papa John’s franchisees, four franchisees in Queens have agreed to pay more than $500,000 to settle minimum wage and overtime claims under the Fair Labor Standards Act (FLSA) and New York labor laws. The claims were filed by the New York Attorney General and the U.S. Department of Labor. The settlement will provide back pay to more than 250 workers.
Wage Theft Investigation
This settlement follows joint investigations by the state in conjunction with the Department of Labor beginning in 2008. Investigators found that some Papa John’s stores failed to pay employees the minimum wage and overtime wages required under FLSA and New York state law. Other stores were found to have violated a state wage law that required employers to pay an additional hour at minimum wage when workers’ daily shifts are longer than ten hours. Under New York labor laws and FLSA, employers are required to pay workers at least the minimum wage for all hours worked and overtime at one-and-one-half times their regular rate of pay for hours worked in excess of forty hours in any given workweek. In New York, the minimum wage is $8.75 per hour.
The settlement will pay out $469,355 in back wages and liquidated damages to affected workers. Additionally, the franchisees agree in the settlement to institute complaint procedures, post a statement of employees’ rights, and designate an officer to submit quarterly reports to the attorney general’s office regarding ongoing compliance for three years. Additionally, one of the franchisees must retain an independent monitor.
Joint Employment and Franchises
According to the DOL, many franchisees conduct business in low-wage industries where workers are inherently vulnerable, like the fast food industry. Although franchising is a legitimate business model, in can also be associated with practices that lead to violations of labor standards. The DOL calls this a manifestation of an increasingly “fissured workplace,” where employers try to find ways to distance themselves from their workforce. The DOL has found that the greater this distance, the more likely wage violations are committed. Therefore, in addition to responding to complaints, the DOL has engaged in directed investigations where there evidence that workers are most at risk for wage violations, particularly in low-wage industries.
Franchisees in low-wage industries such as fast food are more susceptible to committing wage violations. You should call (855) 754-2795 or complete the Free Unpaid Overtime Case Review form on the top right of this page if you believe your wage rights have been violated. Our top-rated team of wage lawyers will evaluate your situation to determine your best course of action. We will also determine if it is in your best interest to file a lawsuit against your employer. There are strict time limitations for filing, so it is important that you call our experienced attorneys today.