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How Fast Food Franchises Cheat Workers Out of a Just Wage

How Fast Food Franchises Cheat Workers Out of a Just Wage

Workers in fast food restaurant franchises are not only paid the minimum wage. More than a few of the approximately 4 million franchise workers employed in restaurants are being shortchanged out of wages by their employers, who do not pay them overtime or who siphon off hours of overtime (adding up almost to a thousand dollars, in some cases) from computer systems.

Workers at Papa John’s are expected to start working before clocking in and, after clocking out, to perform tasks such as cleaning, says Colorlines. For a worker who makes the minimum wage of $7.35, and is “supposed” to work two to four hours a week without pay, that adds up to a loss of about $90 a month and nearly $1,000 a year.

The U.S. Department of Labor had previously found that 40 percent of fast food outposts in the country “fail to consistently pay their employees a minimum wage or overtime.” More recently, the New York Attorney General found that 84 percent of fast food workers said they were routinely forced to work overtime without pay and to pay for fuel when making deliveries.

Workers don’t feel they have any choice but to comply with this unfair system. “The thing is, you know that you should be paid, but to show that you want to keep your job, that you are a good worker, that you are a team player, you do it,” Olivia Roffle, who used to work at a Papa John’s outlet in St. Louis, Missouri, said to Colorlines.

A worker at a Burger King in Kansas City, Missouri, says that her manager routinely changed the number of hours she had worked in the computer system so she would not be paid overtime.

The Evils of the Franchising System

As you might expect, companies insist that “rogue” managers are behind such wage theft. But the franchising system, in which franchise owners pay fees to companies like Burger King and are required to follow strict rules and standards, could be the real source of the problem. The fees for training and sometimes rent (if a corporation like McDonalds owns the real estate an outlet is located in) are fixed. To make a profit, a franchise owner has to rely on sales, which can be unpredictable.

The one area that companies do not place a mandate on is hiring, wages and hours, as Colorlines points out. These are left to the franchise operators. Indeed, a clause in their contracts carefully absolves companies from responsibility about wages and labor practices. When questioned about how workers at franchises are paid, the franchises can (and do) say that it is the U. S. Department of Labor’s job to enforce wage and payment issues, not the parent company.

Fast food workers have made some small gains in fighting for fair labor practices. Because Domino’s was apparently heavily involved in the operations of its franchises in New York, that company has been named as a defendant in a class action suit filed by delivery workers. In six cities, workers at fast food franchises have held one-day walkouts.

Their protest is largely symbolic so far but its importance can’t be denied. Business Week reports that restaurant franchises are hiring. About 14,000 positions in franchise restaurants were created in May (out of 19,000 franchise positions total). But franchises are hiring more part-time workers, possibly in a effort to dodge Obamacare’s requirement to provide healthcare for full-time workers. Again, workers are getting shortchanged so someone else can add to their profits.

What’s too clear is that fast food restaurants not only serve up unhealthy (and potentially addictive) food. They’re also, behind the scenes, making people serve up that food while working under unfair conditions.

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Photo via The Consumerist

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109 comments

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2:09PM PDT on Jul 31, 2013

How is this for an idea to help increase the wages of fast food workers at least temporarily? Each customer leaves a $1 tip for each order. The tips would be divided equally among the workers (not the managers or owners). This is assuming that the bosses would allow the workers to have the gratuities. A $15 an hour minimum wage is still the goal. But
why couldn't we who could afford it take some responsibility for the workers' income? After all, what else is going care? The politicians?

11:22PM PDT on Jul 7, 2013

Just to add to all of this the food come in at Olive Garden precooked and Bob Evans too! They limit full time workers also!! And are being prepared for Obama Care to take effect!!! There are no doubt other places just the same!! My question would be why aren't they already setup for this??? Maybe because they weren't going to do anything?? These workers also rely on Aid!
Thank You

11:10PM PDT on Jul 7, 2013

Regardless where you work NEVER work off the clock if you are caught working off the clock you may be terminated and should be! If you are injured mopping floors or anything, be injured in any way the COMPANY IS NOT RESPONSIBLE SINCE YOU ARE OFF THE CLOCK !!!! THERE ARE LAWS TO PROTECT YOU AND THESE SHOULD BE USED! NEVER WORK OFF THE CLOCK!
THANK YOU

4:02AM PDT on Jul 3, 2013

With ObamaCare, it's going to get worse!

8:07PM PDT on Jul 2, 2013

Back in 1963 I worked for the summer in a mom-and-pop drive-in as a carhop. Loved this job - It was my first one and I lucked out. The owners were an ex-cop and his wife. The hours were great for a 15-yr-old and they were nice people, honest and hard working.

The next summer I also lucked out because I went to work at a local A & W drive-in, again as a carhop. The owners were local people, been in that same location for yrs and I loved working there too. They even had a couple college kids that came back each summer to work.

Back then, businesses like those were fun and great to work at.

My oldest granddaughter worked at her local MacDonalds while in high school. Her experience was so much different than mine. She said the boss was a "slave-driver", among other things. I thought she was a bit melodramatic, as most teens. But after reading this article I think I owe her an apology.

10:41AM PDT on Jul 2, 2013

Very bad and sad :(

7:55AM PDT on Jul 2, 2013

"As you might expect, companies insist that “rogue” managers are behind such wage theft. But the franchising system, in which franchise owners pay fees to companies like Burger King and are required to follow strict rules and standards, could be the real source of the problem."

Of course, each side points the finger at the other. But what I remember most is Peyton Manning and Papa John's founder on television incessantly during the fall talking about giving away 2 million pizzas during the NFL season. So this is how they do that? And pay Peyton his nice big endorsement check? By cheating their employees? The part that really annoys me is that I'm not at all surprised, I believe this common practice in all fast food establishments, where profit margins, they claim, are thin, but not so thin as to have the franchise owner driving a beater - those folks do quite well, for themselves and no one else, employing WalMart tactics of no full time workers and no benefits. Just typical "job creators" is what they are. And disgusting as well.

11:29AM PDT on Jul 1, 2013

A request for information:

I've heard that Olive Garden does not even pay its servers the less than $3 per hour minimum wage; that a full week's work gets a wait person about $1 pay for the whole week.

Is this true? If so, how does Olive Garden get away with it?

10:37AM PDT on Jul 1, 2013

i don't understand how anyone can get addicted to fast food. at least @Papa John's if you omit the cheese & add veggies to your pizza you can get a vegan pizza since their pizza sauce & dough are vegan. but i wouldn't want to go anywhere that is unfair to their employees, yet @the same time i'm sure they won't miss me b/c so many ppl pay to eat their food.

9:55PM PDT on Jun 29, 2013

They're the biggest crooks period! Can we also lay the obesity crisis on them....it's only fair! Thanks

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Kristina Chew Kristina Chew teaches and writes about ancient Greek and Latin and is Online Advocacy and Marketing... more
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