Question

Domino's Pizza franchises in New York were sued by the state of New York in 2016 for wage theft at 10 stores. Under New York law, a corporation and a franchiser are joint employers if they meet certain criteria regarding employee control. The state found that Domino's met the criteria for being a joint employer because it mandates a significant number of policies with which franchisers must comply. The problem arose when Domino's mandated the use of PULSE payroll software, which the pizza company knew to be flawed and did not attempt to remedy. the flawed software led to employees being paid at rates below the legal minimum wage, failed to pay overtime, did not reimburse employees for vehicle use, and abused tip credit guidelines. Should the franchisers be held liable as joint employers with Domino's? Why or why not? Which laws pertain to employee wages?

Answer 1

Domino's shall not be held liable as joint employers with the Franchisee. In the verdict given by the court in case of this issue in 2016, it was affirmed by the court that, Domino's was not to be considered as a joint employer of the Franchisee. The reasons cited for the ruling are listed as under: Domino's did not have the power to hire and fire the franchisees' employees Domino's did not supervise the employees' scheduling or other conditions of employment. For example, even though Domino's has prescribed certain requirements i. ii. like store opening hours, minimum staffing requirements and other quality control points, however, they does not constitute control over individual employees iii. The franchisees controlled the rate and method of payment for the employees and not Domino's Likewise, even though Domino's could access certain employee records, it was not responsible for maintaining these records. Also, even though Domino's imposed certain standards on franchisee employees, such as uniform and appearance standards, its enforcement and discipline regarding violations ultimately rested with the franchisee. iv. V. The standards that Domino's required of franchisees such as product quality and appearance was all concerned for brand standards, and not terms and conditions of employment. vi. Thus, Domino's should not be held as a joint employer of the Franchisee. The Work and Hour Laws pertains to Employee Wages.