US Department of Labor Sues Subway Restaurant Franchise over Wage and Hour Law Violations

February 6, 2012: According to a press release from the US Department of Labor, a Subway franchise in Ohio owned by Hray Enterprises has been sued for back wages of 68 employees in 5 restaurants. The owners Joseph Hray and Tammy Hray were investigated by the Wage and Hour Division and are alleged to have violated minimum wage, overtime, and child labor laws.

The two-year investigation found that the franchisee did not pay employees for the hours they worked after the store closed (overtime violations) and employees were docked wages when their cash registers were short, (minimum wage violations). Most seriously, minors were found performing dangerous tasks that are prohibited by child labor and OSHA laws.

Workers under the age of 18 have special restrictions about operating hazardous machinery in the workplace. Restaurants have special OSHA regulations about teen workers. Minors are prohibited from operating or loading balers and trash compactors, and five of the employees regularly had to do so as part of their duties.

According to the press release, “employers may make wage deductions for cash register shortages, certain uniforms and food; however, the deductions cannot result in an employee earning less than the minimum wage for all hours worked in every workweek.” In this case, the wages that were deducted lowered the rate of pay as to fall below the allowable amount. Additionally, the overtime work should have been paid at a rate of time and a half to comply with federal laws.

This year, 6 out of 10 restaurants in California will be sued by their employees. Inspections are increasing and wage and hour laws are becoming more complicated. Many employers are not aware of the laws or have difficulty understanding how to comply with them.

This is where Invensure can help. Because we specialize in insuring restaurants in Southern California, it is our job to advise you how to minimize your liability. A good Employment Practices Liability insurance (EPLI) policy could help to recover some of the financial damages from an employee lawsuit.

Are you protected? Call (800) 331-4700 to learn more.