Papa John's franchises to pay $500k in wage theft settlement

NEW YORK, Oct. 17 (UPI) -- The owners of four Papa John's Pizza franchises in New York will have to fork over about $500,000 in settlement fees after admitting to paying employees unfair wages.

According to an announcement made Thursday by the state's attorney general and the U.S. Labor Department, the settlement will be divided among 250 workers from nine Papa John's restaurants located in Queens, Brooklyn and The Bronx. The money's recipients -- each most likely receiving $2,000 -- include current employees and those who had worked at the locations since 2008.

"Fast food chains across the state should be on notice: we will not stop until your workers are treated with respect and paid lawful wages," said N.Y. State Attorney General Eric Schneiderman. "I call on Papa John's and other fast food companies to step up and stop the widespread lawlessness plaguing your businesses and harming the workers who make and deliver your food."

The case did not involve parent company Papa John's International, Inc., but four current and former franchise owners. Over the summer, another franchisee, Abdul Jamil Khokhar, was charged with cheating his Papa John's employees out of their pay and will serve 60 days in jail. Khokhar was also ordered to pay $230,000 in back wages to his workers.

"Employers who underpay their employees not only deprive workers of the funds needed to buy their food, pay their rent or attend to other necessities, they undercut those law-abiding employers who pay their employees properly in the first place," said David Weil of the Wage and Hour Division of the U.S. Department of Labor.

"Although franchising is a legitimate business model, it can also be associated with practices that lead to violations of labor standards," Weil added. "Franchisees must understand that they are not exempt from the law."