Papa John’s Employees Recover for Wage Violations

Papa John’s Employees Recover for Wage Violations

Fast Food Franchise Owners Commit Wage Violations

New York Attorney General (AG) Eric Schneiderman, with the help of the US Labor Department (DOL), has devoted great effort to pursuing fast food businesses and holding them accountable for violations of state and federal wage and hour laws. Papa John’s is one such business of particular interest because of what appear to be rampant violations of wage and hour regulations by various franchise owners operating in New York City.

Companies are required by law to pay their workers at least minimum wage. In New York City, the minimum wage for employees in the fast food industry increased on December 31, 2015, to $10.75 per hour. It is scheduled to increase annually until 2021 when it reaches $15.00 per hour.

Businesses are also required to compensate employees for overtime at a higher rate of pay. Overtime is any time worked beyond 40 hours in a workweek. The amount of pay for the hours of overtime must equal the regular hourly rate plus half (time-and-a-half). For example, if an employee earns $20.00 per hour, and works 42 hours in a workweek, the employee should receive $30.00 per hour for the two hours of overtime.

Unfortunately, many businesses do not abide by the regulations because they are indifferent or perhaps malicious. Whatever the reason, it is workers who lose. Thankfully, employees can file claims for unpaid wages and unpaid overtime and try to obtain the fair pay to which the law entitles them. The Attorney General’s office also has the authority to investigate and file complaints against businesses with questionable practices. The AG and DOL have made much progress in helping employees of many Papa John’s franchises in New York City receive settlements awarding them back pay.

Recent Settlement Restores Unpaid Wages and Overtime to Hundreds of Employees

Most recently, the operator of Papa John’s franchises in Washington Heights settled with the US Labor Department agreeing to compensate more than 200 employees for unpaid wages, overtime and additional monies owed.

In this matter, the Attorney General’s office accused Sultan Ali Lakhani, owner of three franchises in the Bronx and Manhattan of “systematically failing to pay [their] employees minimum and overtime wages.” Schneiderman also alleged that the owner violated New York regulations requiring additional pay for employees who work daily shifts of more than 10 hours. It appears that Lakhani also deducted wages from the paychecks of delivery employees, charging them for costs associated with bicycle equipment and maintenance required for their jobs.

As part of an agreed upon settlement, Lakhani will have to pay approximately $500,000 to the exploited workers. The three franchises must also “institute complaint procedures, post a statement of employees’ rights, and designate an officer to monitor ongoing compliance. The stores must also submit quarterly reports to the attorney general’s office for three years.”

NYC Franchisees Pay Employees Hundreds of Thousands in Back Wages and Unpaid Overtime

The settlement with Lakhani represents just one in a series of enforcement actions involving Papa John’s franchise owners and operators. Additional unpaid wages and unpaid overtime cases in New York City include:

  • • Syed Mehboob and his stores paid $400,000 in restitution and liquidated damages for violations between August 2008 and August 2014.
  • • Mohammed Hasnat, who owns a Papa John’s franchise in the Bronx, paid $40,000 in restitution and liquidated damages resulting from violations that occurred between January 2014 and July of 2015.
  • • In February and March of 2015, the NY Attorney General obtained judgments against two Papa John’s franchisees, for violating wage laws. Those judgments totaled almost $3 million.
  • • In July 2015, the AG arrested Abdul Jamil Khokhar, who owns nine Papa John’s Pizza franchises in the ‪Bronx. He pled guilty to failing to failing to pay workers minimum wage and overtime and of trying to hide evidence of the violations of wage laws. Khokhar was sentenced to serve 60 days in jail and ordered to pay $230,000 in restitution to employees. The U.S. Department of Labor also recovered an additional $230,000 as liquidated damages and civil money penalties of $50,000.‬‬‬‬‬

AG Schneiderman remains committed to ensuring that New York employees receive every dollar they deserve. He states, “When businesses brazenly violate the law by systematically failing to pay their employees minimum and overtime wages, they rip off some of our state’s most vulnerable workers. I have called on corporate leaders in the fast food industry – including Papa John’s – to step up and stop these ongoing violations, which are so pervasive in this company and industry.”

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Having an experienced unpaid wage and unpaid overtime attorney from Leeds Brown review your claim can be helpful if you wish to recover the money your employer owes you. Call us 24/7 at 1-800-585-4658 for a free case evaluation.


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