A Dunkin’ Donuts franchise owner based in Edison, N.J., will be forced to pay managers back wages after violating the Fair Labor Standards Act, according to a new ruling by the U.S. Labor Department last Monday.
QSR Management LLC agreed to pay $197,550 in back wages to 64 employees after a probe by the U.S. Labor Department found that the company incorrectly claimed that managers at Dunkin’ Donuts were exempt from getting overtime. The company runs 55 Dunkin’ Donuts franchises around Staten Island and New Jersey.
QSR legal representation argued in court that managers at their establishments were exempt from overtime requirements because they’re salaried employees, but labor officials said that the reality at those Dunkin’ Donuts involved QSR treating managers as hourly employees instead of salaried. Treating them as hourly employees reduced managers’ pay when they worked less than 60 hours in a week. Overtime exemption only applies if the managers receive a guaranteed weekly salary of $455. According to officials, the managers weren’t paid that guaranteed $455 every week.
Officials also learned that at two stores, management took tips from customers to cover cash register services. This resulted in $237 in minimum wage violations for eight employees.