With all the attention given to McDonald’s, no one ever suspected little o’l Subway of being the stingiest fast-food employer in America. But according to a new FORTUNE article, Subway pays its employees the lowest wages out of its competitors — and pointed to over 17,000 labor violations over the last thirteen years as proof.
How much money did they screw out of their employees, many of whom make little over the federal wage ($7.25/hr)? Franchisees had to reimburse their “sandwich artists” nearly $3.8 million, and the Department of Labor’s been chasing after them to enforce compliance with their standards. “It’s no coincidence that we approached Subway because we saw a significant number of violations,” a Department of Labor spokesperson said.
And not only were they significant, they were also common:
A 2009 study by several think tanks estimates about 18% of restaurant 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.
Common incidents include employers forcing workers to deduct a 30-minute lunch break, even though the employee didn’t take a break. Some workers are forced to pay for a company uniform, which can be a violation if, after deducting that expense, the worker’s hourly rate falls below the minimum wage.
Oh, examples? You want concrete examples? How about this one:
In a 2012 lawsuit, a Subway franchisee in Ohio, Hray Enterprises, was found in violation of labor laws after it failed to pay employees for the time they spent doing the nightly closing routine. For example, Hray Enterprises might say a worker’s shift stopped at 10 p.m. when it actually took another half hour to shut the restaurant down and clean up.
The franchise also made illegal deductions from employees’ wages when there were cash register shortages, causing their pay to fall below the federal minimum wage. These were repeat offenses, and owners Joseph and Tammy Hray were ordered to pay $9,900 back to 72 employees.
More transgressions, as well as the DOL’s crackdown on these practices, can be found below.
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