Subway Leads Fast Food Industry in Underpaying Workers

When it comes to underpaying their employees, Subway takes first place in the food industry. Individual Subway franchises have been found in violation of pay and hour rules in more than 1,100 investigations ranging from 2000 to 2013, according to CNNMoney.

These cases found that about 17,000 Fair Labor Standards Act violations resulted in franchisees having to reimburse Subway workers more than $3.8 million over the years.

The most frequent violators in the food industry are Dunkin’ Donuts and McDonald’s. 

The Department of Labor partnered with Subway’s headquarters to boost compliance efforts last year. “It’s no coincidence that we approached Subway because we saw a significant number of violations,” a Department of Labor spokesperson said.

The fast food franchise model provides a layer of protection for Subway, McDonald’s and Dunkin’ Donuts. Even though fast food locations may look the same and restaurants abide by similar branding and business guidelines, each franchise owner is treated essentially as a small business. Therefore, the corporate parents can have nothing to do with being liable for labor violations.

Wage violations are common. A study conducted in 2009 found that about 18% of restaurants and hotel workers face minimum wage violations. 70% face overtime violations and 74% encounter what are known as “off-the-clock” violations, where workers are expected to do tasks without being paid.

In addition to the Department of Labor’s investigations, there has also been a rise in private lawsuits related to wage and hour complaints. Lawsuits related to FLSA violations reached a record high in 2013, according to law firm Seyfarth Shaw.

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