In the Real World: Scenario for Discussion

Dominos Pizza franchises in New York were sued by the state of New York in 2016 for wage theft at 10 stores. Under the New York law, a corporation and a franchiser are joint employers if they meet certain criteria regarding employee control. The state found that Dominos met the criteria for being a joint employer because it mandated a significant number of policies with which franchisers must comply. The problem arose when Dominos mandated the use of the 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, failed to pay overtime, did not reimburse employees for vehicle use, and abused tip credit guidelines.

Should the franchisers be held liable as joint employers with Dominos? Why or why not?

Which laws pertain to employee wages? How would they apply in this situation? What could be done to ensure future legal compliance?