AG Schneiderman Announces Labor Settlements with 23 Domino's Restaurants in Eight New York Counties

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Six Pizza Franchisees, Who Own The Locations, To Pay $450K In Restitution For Labor Violations, Including Subminimum Wages.

New York, NY - March 27, 2014 - Attorney General Eric T. Schneiderman today announced settlements totaling $448,000 with six Domino’s Pizza franchisees, who together own 23 stores. The stores are located in New York City and Dutchess, Erie, Nassau, Rockland, Schenectady, Suffolk and Westchester counties. The settlement money will be distributed among approximately 750 minimum-wage employees who were underpaid by the franchisees.   
 
“The violations in these cases demonstrate a statewide pattern of Domino’s franchisees flouting the law and illegally chiseling at the pay of minimum-wage workers, who struggle to survive as it is,” said Attorney General Schneiderman. “My office will be relentless in pursuing fast-food employers that underpay the hardworking people who are the backbone of their operations.”
 
A chart listing the six franchisees and the restaurant locations can be found here.  
 
Attorney General Schneiderman’s investigation found that from 2007 to 2013, the Domino’s franchisees violated numerous safety net labor laws designed to protect the lowest wage workers. The franchisees admitted to the violations of law outlined in the settlement agreements. The violations varied by location and time period, and included the following:  
  • Some franchisees paid delivery workers as little as $5 per hour, which is below the $5.65 tipped minimum wage that has applied to delivery workers since 2011 under New York law. 
  • Two franchisees failed completely to pay adequate overtime, as required by law.  
  • Other franchisees underpaid 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.
  • Employers may take a “tip credit” and pay a lower minimum wage to tipped restaurant employees only if those employees spend most of their time – at least 80 percent – performing tipped work.  Some stores took a "tip credit" but failed to ensure that delivery employees spent no more than 20 percent of their time doing kitchen or other untipped work. 
In addition to payment of restitution funds, the franchisees must also institute complaint procedures, provide bilingual written handbooks to employees, train supervisors on the labor law, post a statement of employees’ rights, and designate an officer to submit quarterly reports to the Attorney General's Office regarding ongoing compliance for two to three years. Two of the franchisees with the most egregious violations were also required to hire an independent monitor who will conduct unannounced inspections.  Investigations of additional Domino’s franchises are ongoing.
 
Most of the workers will get back between $200 and $2,000, depending on the facts related to their employment, including their hours, wages, and length of employment. 
 
These settlements are the third to come out of ongoing investigations of numerous fast-food employers by the Attorney General’s Labor Bureau for labor law violations. Last week, the Attorney General announced a $500,000 settlement with a New York City McDonald's franchisee. In December, the Attorney General secured reinstatement for 25 workers at a Domino's Pizza franchise store located in Manhattan's Washington Heights neighborhood. 
 
The cases were handled by Assistant Attorney General Haeya Yim and Section Chief Andrew Elmore in the Attorney General’s Labor Bureau, which is led by Bureau Chief Terri Gerstein.  The Executive Deputy Attorney General for Social Justice is Alvin Bragg.
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