Earlier this year, several Quick Serve Restaurant (“QSR”) franchises were found to have violated wage and hour laws by illegally employing minors. The total penalty imposed was $212,754. Perhaps more important was the reputational damage suffered at these restaurants and to their franchise systems as a whole. This is why we continually preach to our franchise clients that their system is only as strong as its weakest link. It’s not enough that your franchise is a leader in its industry. One bad actor at one store can jeopardize your franchise, your business, and your system as a whole. And that bad actor need not be the owner or even acting intentionally!
If you recall back to December 2022, a Pennsylvania-based QSR franchisee was found to be utilizing over 150 minors at 13 of its stores in violation of wage and hour laws. The DOL is actively looking for unlawful employment of minors. Ignorance by ownership is no excuse so you need to know what’s going on in your stores and the wage and hour laws regarding minors.
Are you in your stores 24/7; of course not. Therefore, is there any way you can truly know what’s happening in your stores at all times? Of course not! You are dependent on your team, and therefore, you are only as protected as the weakest link on your team.
Consider the following reality checks:
- Would you know if one of your nightshift employees brought his/her 10-year-old child into one of your stores and allowed the child to “help out” at midnight?
- Would you know if a fifteen-year-old was asked to run the manual fryer because a co-worker called out sick?
- Would you know if your high school-aged employees were scheduled for 3.5-hour shifts instead of 3-hour shifts or if those shifts ran until 7:30 pm instead of 7:00 pm (potentially in violation of your state’s laws)?
The answer to all these questions is probably no, but that doesn’t mean these things aren’t happening. And if they are happening, you will be the one held responsible, and it will be your face and name in the national papers.
Here are a few tips you should remember and share with your management team. The federal government sets the minimum standards for wage and hour laws including those that govern the employment of minors (i.e., how many hours per day, what time of day, what type of jobs, etc.). Each state can also set its own standards, which can be more burdensome than the federal government’s. You, as the owner, need to be aware of and follow both sets of rules. If your state is silent on the matter, then you only need to follow the federal FLSA.
So, what should you do now? First, train your managers. Be sure they know what the relevant laws allow and prohibit. Next, remind your employees of the rules so they will follow them and hopefully alert you when someone else is violating the law. No need to stress these are laws but rather Company policies. Review key compliance laws in your regular management meetings. Have members of your executive team either visit stores during off hours, or at least, monitor your surveillance cameras for such misconduct. The bottom line is you must ensure everyone knows these rules and you can independently verify compliance – on at least a spot-check basis. Otherwise, you are taking unnecessary risks.
Brody and Associates regularly advises management on complying with the latest local, state, and federal employment laws. If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560.
