More Papa John’s Franchises Will Pay for Employee Wage Theft

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More Papa John’s Franchises Will Pay for Employee Wage Theft

Jessica Mason Pieklo

The New York Attorney General's Office announced a settlement with four Papa John's franchises for more than $500,000 in wage theft claims.

Four Papa John’s franchisees in New York will pay more than $500,000 to settle claims that they cheated employees out of minimum wages and overtime pay.

Fifty-six percent of fast-food workers older than 20 are women, while 43.8 percent are people of color, according to the Center for Economic and Policy Research.

This is just the latest government action against Papa John’s stores that have been found to violate basic federal and state labor laws.

Attorney General Eric T. Schneiderman and the U.S. Department of Labor announced the settlements last week. The three current and one former Papa John’s franchisees together owned nine restaurants in Queens, the Bronx, and Brooklyn.

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The Papa John’s owners admitted to a number of labor violations concerning minimum wage, overtime and other basic labor law protections, according to the New York Attorney General’s Office. More than 250 workers will receive back pay owed to them.

Both New York and federal law require employers 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 40 hours in any given workweek.

New York’s minimum wage is $8.75 per hour.

“Once again, we’ve found Papa John’s franchises in New York that are ripping off their workers and violating critical state and federal laws,” Schneiderman said in a statement. “Fast food chains across the State should be on notice: we will not stop until your workers are treated with respect and paid lawful wages.”

This latest settlement with Papa John’s franchise owners for wage theft claims followed joint investigations with the Department of Labor beginning in 2008. Investigators discovered that some stores failed to pay employees the minimum wage and overtime wages required under the federal Fair Labor Standards Act and state law, while others violated a New York state requirement that employers must pay an additional hour at minimum wage when employees’ daily shifts are longer than ten hours.

“Employers who underpay their employees not only deprive workers of the funds needed to buy their food, pay their rent or attend to other necessities, they undercut those law-abiding employers who pay their employees properly in the first place,” Dr. David Weil, administrator for the Wage and Hour Division at the U.S. Department of Labor, said in a statement following announcement of the settlement.

Despite the violations, the franchises will be allowed to remain open. Along with payment of $469,355 in back wages and liquidated damages, the franchisees must 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. One Papa John’s franchisee must retain an independent monitor going forward.

The prosecutions from Schneiderman’s office support efforts by the Department of Labor to revise labor and employment law to reflect modern employment practices. That includes a recent ruling by the National Labor Relations Board that could hold corporate parents like Papa John’s responsible for the unlawful employment actions of franchise owners.