Franchisee Now Pays A Whopping $218K For Stealing Money

March 12, 2024

A franchisee now pays a whopping $218K for stealing money that belonged to its employees after illegally altering wages.

Ten Subway franchise locations in Washington have paid a total $218,165 in back pay, damages and fines after the U.S. Department of Labor alleged owners and managers illegally participated in employee tip pools.

The DOL investigation found that managers and owners illegally participated in employee tip pools and “manually adjusted hours to avoid paying overtime.”

An investigation by DOL’s Wage and Hour Division found the franchisees — Jani Enterprises Inc., Keeyarah Enterprises Inc., Kian Enterprises Inc. and Quantum Enterprises USA Inc. — took tips from 100 employees that were left through credit card payments, adjusted timesheets to keep hours below 40 hours per week and didn’t combine hours worked at multiple locations under common ownership to “evade [the] legal obligation to pay overtime rates,” per a DOL press release.

The franchise owners did not respond to requests for comment.

“These Subway owners and managers willfully violated the Fair Labor Standards Act by underpaying employees and pocketing tips that did not belong to them,” Thomas Silva, district director of the DOL’s Wage and Hour Division in Seattle, said in a March 5 statement.

“We encourage employers to review their practices and avoid the costly consequences of illegal actions.”

WHD enforces the Fair Labor Standards Act, which sets standards on minimum wage, overtime pay, recordkeeping and youth employment.

The agency regularly investigates violations in the restaurant industry, including loss of tips, overtime and improper use of child labor.

A Mexican restaurant chain, Plaza Azteca, also agreed in November to pay $11.4 million in back wages and damages for more than 1,000 employees at more than 40 restaurants after the DOL found it allegedly violated overtime and minimum wage requirements.

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Also Read: A Massive Mall Retailer Is Now Closing in California

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A US plant now makes an unexpected closure affecting thousands of employees by this upcoming June, sources confirm.

Tyson Foods has decided to shut the doors of its Perry, Iowa pork plant at the end of June after closing just six plants last year.

“After careful consideration, we have made the difficult decision to permanently close our Perry, Iowa pork facility.

We understand the impact of this decision on our team members and the local community,” a Tyson Foods spokesperson said in a statement to local CBS affiliate KCCI.

“Taking care of our team members is our top priority and we encourage them to apply for other open roles within the company.

We are also working closely with state and local officials to provide additional resources to those who are impacted.

“While this decision was not easy, it emphasizes our focus to optimize the efficiency of our operations to best serve our customers.

Iowa remains a key state for Tyson Foods, with employment of more than 9,000 team members across our other Iowa facilities.”

The Iowa location is the ninth processing factory the company has decided to close since 2023 in an attempt to cut costs, reported The Wall Street Journal.

Over the past year, Tyson executives have said they could be closing more of their chicken, beef, and pork plants, according to the Journal.

Tyson is the largest meatpacker in the United States and one of the nation’s largest pork processors.

The Perry plant, which is smaller than other Tyson plants in the state, is estimated to have the capacity to slaughter about 8,000 pigs a day, roughly 2% of the US total, according to agricultural lender Rabobank.

“With the looming closure, 1,200 employees will be left jobless,” reports The-Sun.

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Also Read: Another Business Now Announces Unexpected Layoffs in Kentucky

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