Domino's Pizza franchises in New York were sued by the state of New York in 2016 for wage theft at 10 stores. Under New York law, a corporation and a franchiser are joint employers if they meet certain criteria regarding employee control. 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 flowed and did not attempt to remedy. The flawed software led to employees being paid at rates below the legal minimum wage, failed to pay overtime, did not reimburse employees for vehicle use, and abused tip credit guidelines.

Discussion: 1. Imagine that the flaws in the payroll software were identified by one of the franchisers. Let's call her Judy. One of Judy's employees who worked overtime asked her why he did not receive overtime pay on his pay check. Judy looked into the discrepancy and discovered the flaw. What should she do?

2. Now consider that the Department of Labor performed a payroll audit on Domino's and identified the flaw in the payroll system. It is now being determined whether Domino's (the parent company) is solely liable or if the franchisers should also be held liable. How would Judy's actions in part 1 impact your recommendation to the Department of Labor and New York state?