Papa John’s is the latest fast food franchise to be slapped with a wage and hour violation action by New York Attorney General Eric Schneiderman. The lawsuit stems from the underpayment of delivery workers for the past six years at the pizza establishment’s four Harlem locations.
Law 360 (subscription required) recently reported that the franchisor, New Majority Holdings LLC and its owner Ronald Johnson, allegedly violated New York State Labor Law by reducing 400 delivery workers’ hours by rounding down the number of hours worked, failing to pay overtime for hours worked in excess of 40 per week, failing to pay minimum hourly wages and requiring employees to purchase bicycles and other equipment necessary for their jobs which by New York state law is required to be paid for by the employer. Even though the underpayments total approximately $1 million, Schneiderman is asking for $2.1 million, which includes prejudgment interest and liquidated damages.
An investigation into New Majority Holdings’ payroll activities began in May 2013 after the Attorney General’s office received numerous complaints from delivery workers. Subpoenaed payroll documents from New Majority Holdings, its payroll company and Papa John’s established that the violations had been on going since October 2008.
Schneiderman is trying to hold Johnson personally liable for the payroll violations based on Johnson’s deposition testimony. The state is claiming that the violations were intentional and egregious. The company maintained two different sets of payroll records which support the state’s position.
A recent survey of workers in New York City found that many employees stated that they felt cheated out of wages. This led Schneiderman’s office to investigate and secure settlements with several fast food companies for wage and hour violations.
The attorneys in Sommers Schwartz’s Complex Litigation Group have represented many hourly employees in wage and hour violation actions. If you have questions regarding your rights under the federal Fair Labor Standards Act or state employment laws, contact us today.