Small businesses in the New York City area increasingly are being investigated by the Department of Labor or being named in a lawsuit for unpaid wages by employees. A government audit or lawsuit can have a significant impact on the lifeblood of a business. Employers are required to pay employees minimum wage (currently $8.75 per hour in New York) and eligible employees must receive overtime pay for all hours worked over forty in a work week. Employers also required to maintain certain payroll and time records. An employer’s failure to maintain payroll and time records and pay wages earned form the basis for two of the most common reasons claims are initiated.
Two franchise owners in the Westchester and Hudson Valley area have agreed to pay $735,000 to settle claims of unpaid wages, overtime pay and reimbursements for use of personal vehicles. Unpaid wages claims were not limited to just these two businesses. In fact, over the past two years, more than 50 Domino’s franchise owners admitted to violations of the New York Labor Law. According to the Attorney General’s office, the following are some of the violations:
- Some stores paid delivery workers below the tipped minimum wage applicable to delivery workers under New York law.
- Some stores failed to pay overtime to employees who worked over 40 hours in a week, and others under-paid overtime, because they did not combine all hours worked at multiple stores owned by the same franchisee, or because they used the wrong formula to calculate overtime for tipped workers, unlawfully reducing workers’ pay.
- Delivery workers who used their own cars to make deliveries were not fully reimbursed for their job-related vehicle expenses.
- Delivery workers who used their own bicycles to make deliveries were typically not reimbursed for any expenses related to maintaining their bicycles, nor were they provided with protective gear as required by New York City law.
- Some stores violated a state requirement that employers must pay an additional hour at minimum wage when employees’ daily shifts are longer than 10 hours.
- Some stores also violated a state requirement that employers must pay restaurant workers for at least three hours of work when those employees report to work for a longer shift but are ultimately sent home early because of slow business or other reasons.
- Some stores took a “tip credit” without tracking tips, and assigned delivery workers to kitchen or other untipped work for more time than legally permitted. Employers may only take a “tip credit” and pay a lower minimum wage to tipped restaurant employees if those employees earn enough in tips and spend most of their time – at least 80 percent -performing tipped work.
These violations underscore the unfortunate prevalence of labor law violations – it is wrong for employers to steal hard earned wages from employees. In addition to admitting labor law violations and paying back wages owed and fines, the franchisees have agreed to improve their internal compliance procedures.
If you have not been paid your wages or have experienced discrimination or harassment in the workplace, contact our award-winning employment lawyer to learn your rights and options. In addition, you have a business and want to implement best practices and ensure your business is in compliance with wage and hour laws, contact our office.
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