Wage, hour and overtime lawyers at Pintas & Mullins Law Firm report that 55 Dunkin Donuts franchises in New Jersey were recently ordered to pay nearly $200,000 in back wages to its managers and customer services workers.
The operator of the franchises, QSR Management LLC, also owns Dunkin Donuts locations in Staten Island, New York. The company was recently subject to investigations by the U.S. Department of Labor’s Wage and Hour Division, which found multiple minimum wage and overtime violations. Specifically, investigators found that QSR was not paying its managers overtime wages by listing them as exempt, a clear violation of the Fair Labor Standards Act (FLSA).
All 55 managers will now be paid a collective $197,550 in back wages. Several customer service workers will also be paid a substantial sum because management at two New Jersey locations took tips from them to cover register shortages, resulting in minimum wage issues.
The director of the federal Wage and Hour South New Jersey Office stated that these 55 managers are all entitled to protection under the FLSA. They worked long hours for which they deserve to be compensated, and their employer’s failure to pay for their overtime violated their rights. QSR was fraudulently labeling the managers as hourly workers and reduced their pay if they ever worked less than 60 hours per week.
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Under the FLSA, managers can be exempt from overtime wages only if they perform certain job duties and receive a guaranteed weekly salary of at least $455. QSR never guaranteed these workers a weekly salary and most received under $455 per week, rendering the managers entitled to overtime wages when working over 40 hours in a week. QSR agreed to pay the back wages and changed its employee handbook to reflect its compliance with valid FLSA standards, including no longer allowing management to withhold tips from employees.
The Wage and Hour Division has significantly stepped-up its FLSA compliance investigations throughout the country in recent years, often targeting low-wage industries. Fast food restaurants like Dunkin Donuts often employ vulnerable workers, such as immigrants or the impoverished, so they can more easily get away with pay violations.
When the Department of Labor investigates a business or operations company, it examines and transcribes records from the last three years, looking for complete, accurate, and unambiguous information from each pay period. The Department also confidentially questions employees, and investigates the conditions and practices of the business to determine if it is in violation of any FLSA provision. Those found to be in violation may be fined, imprisoned, or both, depending on the seriousness and amount of violations.
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In related news out of Arizona, a tactical-gear manufacturing company based in Peoria was recently ordered to pay about $124,000 in back wages after a federal investigation. Like the QSR Dunkin Donuts, Tyr Tactical was found to be in violation of the FLSA’s overtime requirements. Investigators discovered that nearly 80 current and former Tyr employees were not properly compensated for the hours they worked beyond 40 in a week.
Tyr manufactures protective and military gear, and many of its employees were working an average of 60 hours per week. Since overtime wages are supposed to be paid as time-and-a-half, the violations resulted in significant paycheck decreases. Workers awarded compensation were employed at Tyr between September 2010 and September 2012.
Wage, hour and overtime lawyers at Pintas & Mullins Law Firm are currently accepting cases involving violations of the FLSA, and provide free legal consultations to potential clients from all 50 states. If you or a loved one feels you were misclassified as an exempt employee or otherwise had your tips or paychecks illegally reduced, contact a qualified wage attorney as soon as possible.