(Over) Time to Make The Donuts? Dunkin’ Donuts Franchise Owner to Pay $200,000 to Managers for FLSA Violations

Violating the Fair Labor Standards Act (FLSA) can cost you a pretty penny, whether you own one restaurant… or 55 of them.

QSR Management, a New Jersey Company that owns 55 Dunkin’ Donuts franchises in Staten Island and New Jersey, has agreed to pay out nearly $198,000 in back wages to 64 managers at locations around the Tri-State area. A U.S. Labor Department investigation discovered that the company had not been paying its managers fair overtime, per FLSA rules. The company argued that the managers were exempt from overtime because they collected a salary. Perhaps the QSR management team didn’t read the Fair Labor Standards Act closely enough. According to news reports, QSR:

• Docked the store managers’ pay when the managers worked less than 60 hours a week;
• Did not pay the managers every work week;
• Failed to pay a weekly salary of $455 or more – the threshold for exemption, according to Section 13(a) of the FLSA.

Southern New Jersey’s Director of Labor Department’s Wage and Hour Division, Patrick Reilly, shed light on the situation: “these managers [at Dunkin’ Donuts] worked long hours, and are entitled to the protection the FLSA affords them. An employer’s failure to pay overtime when required gives them an unfair competitive advantage, violates the rights of the employee, and will not be tolerated.”

Federal investigators also discovered minimum wage violations at two separate Dunkin’ Donuts franchises, in which management took tips from service workers. QSR Management, to its credit, has now revised its employee handbook to ensure that overtime rules will be followed to the letter in the future. The company has also forbidden its managers from taking tips from register workers.

The plaintiffs — 64 store managers, in total — will share $197,787 in back wages.

A Paradigm Shift in How Restaurants Treat (And Pay) Their Workers?

The attorneys here at Joseph & Kirschenbaum have worked hard, for years, to protect the rights of restaurant workers victimized by tip pool violations, FLSA violations, New York Labor Law violations, and overtime pay violations.

It hasn’t been an easy fight. But stories like this one suggest that we may be at the beginning of a “tipping point,” regarding how restaurants nationwide treat their obligations under the Fair Labor Standards Act and other labor laws.

Companies like QSR Management are discovering that it just doesn’t pay to be oblivious. Sure, you can “get away with” not treating your workers fairly, possibly for a while. But justice can and will catch up. And the costs of getting dragged into court, paying back wages and other penalties, and dealing with the damaging press are extreme. To make this shift stick, workers need to be educated about their rights, so that they no longer put up with harassment, discrimination, and wage and hour violations.

If you a your loved one has been mistreated at a restaurant – or other place of work – the team here at Joseph & Kirschenbaum would like to know and would like to help you. Email us at info@jhllp.com, or call (212) 688-5640 now to set up a free, confidential consultation with us.