Papa John’s Slammed with Penalties in Wage Theft Case
A Papa John’s pizza franchise in New York must pay $800,000 in unpaid wages over allegations that the business underpaid employees and failed to pay overtime, a state judge ruled last week. According to a Rewire news report, the judgment is the latest victory against the fast food company holding the corporate owners legally liable for illegal acts of their franchise owners. In December, New York Attorney General Eric Schneiderman sued Emstar Pizza Inc., which operates seven Papa John’s franchise locations in Brooklyn and Queens, alleging that the company underreported hours worked by employees over the past six years.
The attorney general is also considering legal action against Papa John’s International, the franchisor, on the basis that it is a joint employer and therefore liable for the actions of its franchisees. There is precedent for this. In July, a ruling against McDonald’s determined that it is a joint employer and therefore liable for labor or wage violations at its franchise locations.
Corporations such as Papa John’s and McDonald’s employ about two-thirds of low-wage workers in the U.S. However, over the years, they have also been able to dodge liability for the illegal actions of their franchise owners by arguing that each franchise is independently owned and operated.
What is Wage Theft?
Wage theft is an illegal practice of not paying workers for all of their work including violating minimum wage laws, not paying overtime, forcing employees to work off the clock, cutting into workers’ lunch time and so on. This is not just a problem in one part of the country. It happens everywhere and it disproportionately affects low-wage workers. According to the UCLA Labor Center, in Los Angeles alone, low-wage workers lose $26.2 million in wage theft violations every week, making it the wage theft capital of the country.
California has strong labor laws on the books. But wage theft still persists here because of the lack of enforcement. When workers try to report wage theft violations, the process could take years. The UCLA Labor Center also found that a majority of companies who were ruled against by the labor commission never paid back any wages. The current system makes it easy for unscrupulous employers to avoid the consequences of their actions.
How Can Workers Protect Their Rights?
If you have been a victim of wage theft, contact an experienced California employment lawyer who will go after these companies that brazenly violate the law, shave employees’ hours and avoid paying overtime by various means including misclassifying hourly workers as supervisors. You are entitled to the wages you earned. Do not be victimized by corporate greed. Contact an wage & hour lawyer to obtain more information about pursuing your legal rights.