Four current and former Papa John’s Franchisees in New York City have agreed to a 500,000 dollar settlement to pay back 250 employees whose wages were stolen through illegal practices, like forcing them to work unpaid overtime and to work off the clock. The settlement involved nine restaurants in Queens, Brooklyn and the Bronx. The franchisees admitted to violating minimum wage and overtime laws.
New York Attorney General Eric Schneiderman (D) has vigorously prosecuted wage theft in his state, treating it both as a civil and a criminal matter. In July, the Attorney General’s office arrested Abdul Jamil Khokhar, owner of nine Papa John’s stores in New York. Khokar could serve two months in jail for violating minimum wage and overtime laws. While that is barely a slap on the wrist, most states decline to file criminal charges against employers who commit wage theft against their employees.
The criminal prosecution of Khokar, and the civil settlement requiring Papa John’s franchisees to pay back their employees, is a step in the right direction. However, the practice of low wage employers stealing from their employees is widespread, and the Papa John’s franchisees in New York City are just the tip of the iceberg.
An Anzalone Listz Grove Research survey, conducted in April 2013, found that 84 percent of fast food workers and 100 percent of food delivery workers in New York City had experienced some form of wage theft. The Economic Policy Institute cited a three-city study in 2009, that found the average low wage worker is ripped off by his or her employer to the tune of 2,634 dollars a year. Nationally, that extrapolates out to employers stealing over 50 billion dollars a year from their low wage employees.
Attorney Generals in every state should make a concerted effort to go after employers who cheat their workers out of their hard earned money. Americans should of course support an increase in the minimum wage, but they also should demand that employers comply with the law and pay their employees for the hours they work. Without vigorous prosecution of employers who cheat their employees, companies will try to get away with exploiting workers without just compensation. Wage theft needs to be treated like the serious crime that it is, and managers, owners and CEOs who rip off their employees, should be held accountable and prosecuted to the fullest extent of the law, with harsh civil and criminal penalties if they are found guilty.