New York State Attorney General Sues Pizza Franchisee for Alleged Wage Violations

2009-03-20_Papa_John's_Pizza_out_for_delivery_in_Durham.jpgThe New York State Attorney General (AG) filed a lawsuit against a Manhattan pizza franchisee, alleging that it underpaid hundreds of delivery workers by about $1 million. New York v. New Majority Holdings, LLC, et al., No. 452487/2014, verif. pet. (N.Y. Sup. Ct., N.Y. Co., Oct. 16, 2014). The lawsuit claims that the company did not pay its delivery employees for the actual amount of hours they worked, did not compensate them for job-related expenses, and “shaved” hours off their timesheets and paychecks. It seeks about $2 million in liquidated damages, statutory damages, and restitution for underpayment of wages.

Federal law currently sets the minimum wage at $7.25 per hour, 29 U.S.C. § 206(a)(1)(C), and states may establish higher minimum wages. In the state of New York, the minimum wage increased from the federal level to $8.00 per hour at the end of 2013, N.Y. Labor Law § 652. It will increase to $8.75 per hour at the end of 2014, and to $9.00 one year later. New Jersey’s minimum wage is currently $8.25 per hour, and it will increase to $8.38 on January 1, 2015. N.J. Rev. Stat. § 34:11-56a4.

State and federal law requires employers to pay hourly workers at one-and-one-half times their hourly rate if they work more than 40 hours in a week. See, e.g. 29 U.S.C. § 207. A common wage violation involves an employer who requires workers to perform duties outside of the time when they are “on the clock.” If this additional time is taken into account, the amount of wages paid to the worker might be less than the minimum hourly wage, or the worker might be entitled to overtime pay.

New York’s AG is suing a company that owns and operates multiple Papa John’s pizza franchise locations in Manhattan, as well as its individual owner, for wage violations. It alleges that the company regularly paid its delivery workers less than the state minimum wage, and that it is not eligible to pay these workers less under the “tip credit” allowed for servers in restaurants. Even if the company were eligible for the tip credit, the AG claims that it still pays delivery workers less than the minimum rate of $5.65 per hour, with delivery workers typically receiving only $5.00 to $5.50 per hour. New Majority, pet. at 5. The company also allegedly violated state overtime laws by paying delivery workers $7.50 per hour for work performed past 40 hours in a week. Id. at 7.

During a period from October 2008 until at least February 2013, the company allegedly rounded the amount of time reported by delivery workers down to whole hours. The AG offers an example of a delivery worker who worked 69.94 hours during a two-week pay period. The company would pay that worker for a total of 69 hours, leaving the other 0.94 hours uncompensated. Id. at 8.

The company allegedly required delivery workers to use their own bicycles or to purchase one, as well as their own legally required safety equipment. Even though delivery workers spent a substantial amount of work time using their bicycles, the company allegedly did not compensate or reimburse workers for the cost of bicycle maintenance and other expenses.

If you are dealing with a wage claim or another employment law matter in New Jersey or New York, you need the assistance of an experienced employment law attorney. Contact the Resnick Law Group today online, at 973-781-1204, or at 646-867-7997 to schedule a confidential consultation to discuss your case.

More Blog Posts:

NLRB Allows McDonald’s Employees to File Complaints Against McDonald’s and Individual Franchisees as “Joint Employers”, The New Jersey Employment Law Firm Blog, November 3, 2014
Court Rejects Proposed Settlement in Class Action Lawsuit Alleging Wage Fixing by Silicon Valley Employers, The New Jersey Employment Law Firm Blog, October 23, 2014
Court Rules that Restaurant Franchise Must Pay Employees in Money, Not Pizza, The New Jersey Employment Law Firm Blog, September 18, 2014
Photo credit: By Ildar Sagdejev (Specious) (Own work) [GFDL or CC-BY-SA-4.0-3.0-2.5-2.0-1.0], via Wikimedia Commons.

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