New York State attorney general Eric T. Schneiderman delivered a $567,000 lawsuit to Domino’s Pizza on Monday. According to the lawsuit, the chain and three of its franchisees have been underpaying workers in 10 stores in New York at least $565,000 in wages over the past four years by using a payroll system, “PULSE,” that under-calculated workers’ wages.
The franchise supplied stores with the system, knowing that it undercalculated employee salaries, according to an investigation by Schneiderman. Despite updating PULSE, Domino’s has not fixed the issue of underpayment to employees. His investigation also found that Domino’s “played a role in the hiring, firing, and discipline employees, pushed for anti-union position on franchisees and closely monitored employee job performance through onsite and electronic reviews.”
“At some point, a company has to take responsibility for its actions and for its workers’ well-being,” said Attorney General Schneiderman in a press release. “We’ve found rampant wage violations at Domino’s franchise stores. And, as our suit alleges, we’ve discovered that Domino’s headquarters was intensely involved in store operations, and even caused many of these violations. Under these circumstances, New York law – as well as basic human decency – holds Domino’s responsible for the alleged mistreatment of the workers who make and deliver the company’s pizza. Domino’s can, and must, fix this problem.”
In response, Domino’s, the nation’s largest pizza delivery company, has argued that they worked with the attorney general’s office over the past three years to improve fair compensation to workers and to meet New York’s wage laws.
Domino’s spokesman Tim McIntyre said to the Associated Press, “It’s unfortunate that these steps were not enough, and that the Attorney General now wants the company to take steps that would not only deprive our independent business owners of the opportunity to make their own employment decisions, but could impact the viability of the franchise model, the many opportunities it offers to those looking to start their own businesses, and the millions of jobs those franchised businesses create.”
The charges at each of the Domino’s stores vary per store, but they include poor wages, not paying overtime, delivery drivers being paid the tipped minimum wage despite (when not making deliveries) and not fully reimbursing employees for expenses for deliveries.
Previously, the Attorney General’s Office resolved cases involving 61 Domino’s stores over similar allegations, which led to a $1.5 million settlement by the stores.