Domino’s Pizza franchises in New York were sued by the state of New York for wage theft at 10 stores. Under New York law, a corporation and a franchiser are joint employers if they meet certain employee control criteria. The state found that Domino’s met the criteria for being a joint employer because it mandates a significant number of policies with which franchisers must comply. The problem arose when Domino’s mandated the use of PULSE payroll software, which the pizza company knew to be flawed and did not attempt to remedy. The flawed software led to employees being paid at rates below the legal minimum wage, failing to pay overtime, not reimbursing employees for vehicle use, and abusing tip credit guidelines.

Food for thought:
1. Should the franchisers be held liable as joint employers with Domino’s? Why or why not?
2. Which laws pertain to employee wages? How would they apply in this situation?
3. What could be done to ensure future legal compliance?