Outten & Golden: Empowering Employees in the Workplace

Posts Tagged ‘Food Industry’

Papa John’s Franchisee Faces Jail Time Over Stealing Workers’ Wages

Friday, July 17th, 2015

Bryce CovertOn Wednesday, the owner of nine Papa John’s franchises in New York City pled guilty to the first criminal case brought by New York Attorney General Eric Schneiderman against a fast food franchisee over wage theft.

According to court documents, including company records obtained by the attorney general’s office, Abdul Jamil Khokhar, the franchisee, and BMY Foods Inc. paid its 300 current and former workers the same base rate for any hours they worked after putting in 40 a week, which under law should be paid time-and-a-half. To get away with paying less, they allegedly paid overtime hours in cash and created fake names for the employees in the timekeeping system. They then filed fraudulent tax returns that left out the cash payments made to employees under the false names.

Khokhar’s sentencing is set for September 21, when he faces 60 days in jail. He also faces paying the employees $230,000 in back wages as well as an additional $230,000 in damages and $50,000 in civil penalties.

BMY Foods Inc. declined to comment. A Papa John’s spokesperson said in an emailed statement, “Papa John’s is aware of the recent incident involving one of our New York franchisees who was taken into custody this morning. These allegations do not reflect our position as a company. We have a strong track record of compliance with the law. We do not condone the actions of any franchisee that violates the law. This particular franchisee has divested itself of most of its restaurants and is in the process of exiting the system. We will continue to monitor the situation closely and take appropriate action.”

Jail time is unusual for people who perpetuate wage theft, but Schneiderman may not be done. “My office will not hesitate to criminally prosecute any employer who underpays workers and then tries to cover it up by creating fake names and filing fraudulent tax returns,” he said in a press release. “We will continue to be relentless in pursuing the widespread labor law violations, large and small, which we have found in the fast food industry.”

This isn’t the first time Schneiderman has gone after Papa John’s franchisees. In October of last year, he sued some in New York for allegedly stealing wages from more than 400 delivery drivers, seeking more than $2 million in backpay, damages, and interest. Then in February he won a nearly $800,000 judgement against another who allegedly ripped off employees.

He’s also focused on wage theft prosecutions in the New York fast food industry generally. In March of last year, he won a $448,000 payout from 23 Domino’s Pizza franchise owners and a nearly $500,000 one from a McDonald’s franchisee.

Wage theft, where workers aren’t paid minimum wage and/or overtime, are made to work off the clock, or are made to buy uniforms or equipment out of their own paychecks, is particularly rampant in the fast food industry. One poll found that about 90 percent of these workers have experienced at least one form of theft. But it’s also not limited to fast food. In 2012, at least $933 million was won in backpay by the Department of Labor, state labor departments, state attorneys general, and research firms. That sum dwarfs the less than $350 million taken in all robberies that year. Even that understates the extent of the problem, however, since many employees don’t file formal charges; it’s estimated that the country’s employers steal more than $50 billion from their employees every year.

Some places have taken steps to go beyond federal wage and hour laws to try to crack down on wage theft. On Wednesday, Jersey City, New Jersey unanimously adopted a law that would revoke city licenses from any company that doesn’t reimburse workers for lost wages, a step that has been taken in other places across the country. Other cities have upped the penalties for wage theft and enhanced enforcement measures.

This blog was originally posted on Think Progress on July 16, 2015. Reprinted with permission.

About the Author: The author’s name is Bryce Covert. Bryce Covert is the Economic Policy Editor for ThinkProgress. She was previously editor of the Roosevelt Institute’s Next New Deal blog and a senior communications officer. She is also a contributor for The Nation and was previously a contributor for ForbesWoman. Her writing has appeared on The New York Times, The New York Daily News, The Nation, The Atlantic, The American Prospect, and others. She is also a board member of WAM!NYC, the New York Chapter of Women, Action & the Media.

This Restaurant Pays A $15 Hourly Wage With Health Insurance, A Retirement Plan And Paid Leave

Monday, June 15th, 2015

Bryce CovertJen Piallat, the owner of Zazie in San Francisco, knows what it’s like to work in the American restaurant industry. “I worked on the restaurant floor for 30 years before I owned my own,” she said. “I didn’t have savings or health insurance until I was 35.”

The story is very different for her employees today. She had already offered them 401(k) plans with a match, fully funded health and dental insurance, and paid sick leave. And now she’s gone even further, getting rid of tips in favor of increasing pay and offering even more benefits.

At the beginning of the month, the restaurant increased its prices across the board by about 20 percent. She noted some restaurants that have done away with tips have added a mandatory service charge at the bottom of the check instead. “I didn’t want to do that,” she said. “I like the all-inclusive model…of everything, not just service, not just a tip, it’s also full benefits.”

Her servers’ wages, which were already about $15 an hour, will now raise by 2 to 3 percent. But those who work in the “back of the house” in the kitchen or busing tables will get at least a 30 percent increase. Servers will also get a share of profits, receiving 11 percent of their individual sales every day on top of their wages.

And while she offered paid family leave on an informal basis, she said she’s now added it officially to the books. “We have basically full benefits,” she said.

She anticipates the changes will make a big difference for her employees. “Housing is so expensive here,” she noted. Housing costs in San Francisco are up 6 percent over the last year and have risen in some neighborhoods by 50 percent over the last decade. Three years ago, she says, all of her staff lived in San Francisco proper, but now at least a third live outside the city. She also noted that most restaurant workers have no savings, just as she didn’t before opening her own up. But she says that combined, her employees have over $1 million in their 401(k) plans.

Her employees are enthusiastic about the changes. “One of my servers who had been reticent about it said, ‘Can I hug you, I feel great about it,’” she said. After the first day without tips, servers realized that they had more time freed up because they didn’t have to keep track of credit card slips and enter their tips into the computer system. And they’re able to treat customers better as well. One served a table of people with French accents, notorious for low tips given that tipping isn’t customary in Europe, but didn’t feel the pressure to serve other tables better because she might get a better tip. “She said it’s so nice to be totally welcoming and friendly to them and not have to have any concern,” Palliat said.

There is a chance she’ll end up losing money in the new system. “I’m five percent concerned,” she said. She’ll also have to pay more in taxes because what servers used to make in tips, which doesn’t get reported, will now be reported income. But she says it’s still worth it. “I don’t have a problem making a little less to even things out, make it a little more equitable,” she said. Plus the restaurant might benefit from slightly less business: she noted that there’s a consistent two-hour wait on weekends, which she’d like to bring down and might achieve it through people being turned off by higher prices.

She’s going to keep a close eye on profits. But, she said, “I’m definitely not going to ever decrease [the staff’s] percentage… If in six months our profit level has bottomed out, we’ll just have to increase prices.”

By doing away with tips in favor of a living wage, Palliat joins a movement of sorts. It began in high-end restaurants in New York and on the West Coast, but now has spread to lower tier restaurants in Philadelphia, Kentucky, Pittsburgh, St. Paul, Minnesota, and Washington, D.C. While Americans think that our system is a way to reward good service, research has found that in reality tips vary little based on a customer’s experience. Instead, they tend to change more based on appearance and race.

Being compensated through tips can also mean financial hardship for a lot of servers. It means they can be paid a lower minimum wage — the federal tipped minimum wage is just $2.13 an hour. While restaurant owners are supposed to make up the difference if tips don’t bring pay up to at least $7.25 an hour, many don’t. So people who work for tips end up twice as likely to live in poverty.

This blog was originally posted on Think Progress on June 11, 2015. Reprinted with permission.

About the Author: The author’s name is Bryce Covert. Bryce Covert is the Economic Policy Editor for ThinkProgress. She was previously editor of the Roosevelt Institute’s Next New Deal blog and a senior communications officer. She is also a contributor for The Nation and was previously a contributor for ForbesWoman. Her writing has appeared on The New York Times, The New York Daily News, The Nation, The Atlantic, The American Prospect, and others. She is also a board member of WAM!NYC, the New York Chapter of Women, Action & the Media.

 

Two Worlds: Waiters Who Starve, And Those Who Don't

Tuesday, June 19th, 2012

jonathan-tasiniTwo sides of the planet. Two different systems. Two different realities for workers–and, therein, lies the lesson: economies are about power, and values.

Over in the U.S., if you are a waiter in the food industry, you are screwed, as Mark Bittman outlined in his column a few days ago, on the backs of a searing indictment called “The Hands That Feed Us”. Bittman writes:

Help wanted: Salary: $19,000 (some may be withheld or stolen). No health insurance, paid sick days or paid vacation. Opportunity for advancement: nearly nil.

This job, or something much like it, is held by nearly 20 million people, 10 million of whom work in restaurants. They are the workers employed in producing, processing and delivering our food, who have been portrayed in vivid and often dispiriting detail in a new report called The Hands That Feed Us. Written by the Food Chain Workers Alliance, the report surveyed nearly 700 workers employed in five major sectors: production, processing, distribution, retail and service.

The upshot: Our food comes at great expense to the workers who provide it. “The biggest workforce in America can’t put food on the table except when they go to work,” says Saru Jayaraman, Co-Founder of the Restaurant Opportunities Centers United (ROC-U).[emphasis added]

All this comes because of the pathetic “special minimum wage”–$2.13 an hour–paid to restaurant workers:

Take that $2.13 figure, the federal minimum wage for tipped workers. Legally, tips should cover the difference between that and the federal minimum wage, now a whopping $7.25. If they don’t, employers are obligated to make up the difference. But that doesn’t always happen, leaving millions of servers — 70 percent of whom are women — taking home far less than the minimum wage.

Which brings us to the happily almost-forgotten Herman Cain. What’s called the “tipped minimum wage” — that $2.13 — once increased in proportion to the regular minimum wage. But in 1996, the year Cain took over as head of the National Restaurant Association (NRA), he struck a deal with President Bill Clinton and his fellow Democrats. In exchange for an increase in the regular minimum wage, the tipped minimum wage was de-coupled. The result: despite regular increases in the regular minimum wage, the tipped minimum wage hasn’t changed since 1991.

Other disheartening facts: Around one in eight jobs in the food industry provides a wage greater than 150 percent of the regional poverty level. More than three-quarters of the workers surveyed don’t receive health insurance from their employers. (Fifty-eight percent don’t have it at all; national health care, anyone?) More than half have worked while sick or suffered injuries or health problems on the job, and more than a third reported some form of wage theft in the previous week. Not year: week.

And, as a reminder, even the $7.25-an-hour minimum wage, as

I’ve pointed out for a number of years

, is far below what it should be. It should be at least $20-an-hour, if you take into account how much productivity has risen over the past 30 years.

But, now, let’s take a trip half a planet away–to Australia where I have the pleasure of hanging my hat for a bit. The national minimum wage will go up to about $16-an-hour on July 1st. Waiters make that–and usually as much as $20-an-hour. Oh, and don’t forget they also are covered by the national health care plan (called “Medicare” here).

And, so, my Aussie friends are usually mildly annoyed when I add a tip to everything I eat–including coffee. It’s not that Aussies don’t tip–they do. But, it’s seen as an extra, a little more for particularly good service or when it seems appropriate. But, no one tipping a waiter here thinks that, in doing so, they are making a difference between a waiter making the rent or going broke. It’s not that waiters are rich. It is simply that they can do their job and earn a fair wage.

That’s the difference: exploitation U.S.-style versus a fair wage Aussie-style.

That is about basic values, morality and, ultimately, power.

This post originally appeared in Working Life on June 18, 2012. Reprinted with permission.

About the Author: Jonathan Tasini is the executive director of Labor Research Association. Tasini ran for the Democratic nomination for the U.S. Senate in New York. For the past 25 years, Jonathan has been a union leader and organizer, a social activist, and a commentator and writer on work, labor and the economy. From 1990 to April 2003, he served as president of the National Writers Union (United Auto Workers Local 1981). He was the lead plaintiff in Tasini vs. The New York Times, the landmark electronic rights case that took on the corporate media’s assault on the rights of thousands of freelance authors.

What’s Really Happening Behind the Kitchen Door?

Wednesday, June 6th, 2012

From locally grown, organic greens to grass-fed beef, we care about the food that comes out of the kitchen—but what about the workers who chop, grill, sauté and serve our food? Today, the restaurant industry is one of the largest and fastest growing industries in the United States. Despite its size and growth, the industry suffers from pervasively low wages, wage theft, non-existent benefits, rampant discrimination and often dangerous or unhealthy working conditions.

This week in New York City, consumers, students and working people, are coming together for an action and food justice conference to learn more about the enormous impact food workers have on the economy and on consumers, food safety and public health.

This video trailer, for the upcoming book Behind the Kitchen Door, gives a brief glimpse into the working conditions in restaurants told through the stories of workers. According to author Saru Jayaraman, co-founder of the Restaurant Opportunities Centers United, the health and well-being of the second-largest private-sector workforce is at stake—the lives of 10 million people, many immigrants, many people of color, who bring passion, tenacity and important insight into the American dining experience.

It’s no coincidence that seven of the 10 lowest-paying jobs in America are in the restaurant industry, 90 percent of restaurant workers lack paid sick days and only .01 percent are represented by a union. Workers represented by unions, on average, are paid 20 percent higher wages than nonunion workers and are more likely to have paid leave and a secure retirement. Despite facing many barriers, restaurant workers across the country are building awareness among consumers and organizing to improve their working conditions.

As one Washington, D.C., restaurant worker quoted in the book, says:

Customers always ask us if this dish is organic or local, thinking that is what will ensure that they are having a healthy meal, a meal they can feel good about but if they knew about what workers were dealing with…working with the flu, tips and wage being stolen by the owner, getting screamed at and abused by managers, being called racial slurs, getting groped by male workers—they would think twice about the quality of their food.

Learn more about what you can do as a consumer to eat ethically. For more information on Behind the Kitchen Door, check out www.behindthekitchendoor.org, and for a consumer guide to eating out, please visit http://rocunited.org/dinersguide.

This blog originally appeared in AFL-CIO Now on June 6, 2012. Reprinted with permission.

About the Author: Jennifer Angarita is an AFL-CIO Worker Center coordinator.

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