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N.Y. says Domino’s has been late on delivery of wages

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in Employment Law,Human Resources

New York Attorney General Eric Schneiderman has filed suit against Domino’s Pizza affiliates and three franchisees, alleging widespread violations of state wage-and-hour laws.

According to the complaint, Domino’s has known since 2007 that the payroll software it uses under-calculates employee wages, yet the company still encourages franchises to use it. The suit alleges Domino’s, and three of its franchises, have underpaid employees at 10 stores by $565,000. The state seeks an investigation to determine the entire penalty to prevent future violations.

The state also claims Domino’s fails to pay drivers a minimum wage, miscalculates overtime and doesn’t properly reimburse drivers for expenses.

Domino’s expressed “disappointment” about the lawsuit and claims it has worked with Schneiderman’s office for three years to navigate New York’s complicated wage laws.

This marks the first time Schneiderman’s office has sued the franchisor over wage theft issues.

Note: Schneiderman appears to be taking a page out of the National Labor Relations Board’s playbook by using franchisor control as a door to litigation. Franchisors should consult with their attorneys to identify possible wage-and-hour liability in their franchisee agreements.

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