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NY AG Settles Labor Violations with 6 Domino's Franchisees

A Domino's Pizza storefront in Long Beach, New York
A Domino's Pizza store in Mt. Vernon, New York. Photo/bmm

NEW YORK -  Attorney General Eric T. Schneiderman today announced settlements with six Domino’s franchisees over labor violations, requiring them to pay $448,000 in restitution to 750 employees.

The violations include subminimum wages, nonpayment of overtime and failure to reimburse delivery workers for all job-related vehicle expenses. The franchise owners are from eight different counties

The New York AG’s investigation found that from 2007 to 2013, Domino’s franchisees violated numerous safety net labor laws designed to protect the lowest wage workers. The store owners admitted to the violations of law outlined in the settlement agreements.

“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,” AG Schneiderman stated. He added, “My office will be relentless in pursuing fast-food employers that underpay the hardworking people who are the backbone of their operations.”

Settlement outlines franchisee violations

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 paying restitution, 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.

Previous New York AG settlements

Today’s settlement comes on the heels of three other ongoing investigations of numerous fast-food employers conducted by New York AG’s Labor Bureau for labor violations. Last week, Schneiderman announced another settlement for $500,000 with a McDonald’s franchisee. In December, the AG’s Office secured reinstatement for 25 workers at a Domino’s Pizza franchise store located in Manhattan’s Washington Heights neighborhood.


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