Subway Franchises in Violation of Pay and Hourly Rules

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According to a CNNMoney analysis of data collected by the Department of Labor’s Wage and Hour Division, some Subway franchises violated pay and hour rules in more than 1,100 investigations. The investigations started in 2000 and went on until 2013.

Every investigation may lead to multiple violations and fines. The Fair Labor Standards Act found at least 17,000 violations and that resulted in franchisees having to pay their workers over $3.8 million over the years. These numbers reflect unlawful acts that have been caught. Subway has more than 26,000 locations in the United States. A Department of Labor spokesperson said, “It’s no coincidence that we approached Subway because we saw a significant number of violations.”

  

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Usually, corporate parents like to draw a distinction between themselves and independently operated stores. Subway declined to comment to this article. Fast food locations may all look the same and restaurants have some of the same branding and guidelines, but each franchise owner is treated as a small business. This is why the Labor Department’s enforcement workers harder. If the Labor Department investigated a large company like Wal-Mart, it would be easier to investigate, but it can’t do the same for smaller chain restaurants.

The Department of Labor has intensified it’s focus on “fissured workplaces.” Those are businesses in which there’s an indirect relationship between the parent company and the worker. The parent company usually profits from the worker. This also includes companies that depend on independent contractors or staffing agencies.

Several think tanks in 2009, estimated that almost 18 percent of restaurant and hotel workers face minimum wage violations, 70 percent face overtime violations and 74 percent encounter what are known as “off-the-clock” violations, where workers were asked to do certain jobs without getting paid.

The requirement for most fast food employees, that’s required by the Fair Labor Standards Act, is the federal minimum wage of $7.25 an hour, plus time-and-a-half for any work beyond 40 hours a week. Maintaining an accurate time and payroll is also required by employers.

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