Dive Brief:
- The way fast food restaurant franchises are structured is driving a higher number of Fair Labor Standards Act (FLSA) violations, according to David Weil, who oversee's the Labor Department’s Wage-and-Hour (WHD) enforcement strategy argues. But not everyone agrees, according to Bloomberg BNA's Daily Labor Report.
- No matter who is right, Bloomberg reports, fast-food workers typically earn low wages and when Wage and Hour Division investigators audit leading quick-service brands, they’re very likely to find franchisees violating the FLSA.
- A Bloomberg BNA analysis of WHD investigations found that Weil's influence seems to be driving the WHD's enforcement strategy for the quick-service industry.
Dive Insight:
Based on 2001-2005 enforcement results, Weil told Bloomberg BNA that the average franchisee owed $4,265 more in back wages per investigation, much different from a similar outlet owned by the parent company, the franchisor. And three-quarters of investigations at the top 20 fast food companies uncovered at least one FLSA violation.
The restaurant industry's response to its seemingly frequent FLSA violations is that franchisees are small independent business owners who most likely can’t afford a labor attorney. That could be it, but Weil believes cost cutting is at the crux of why fast food franchisees seem to keep have problems with compliance.
It's a debate that no doubt will continue. One complicating factor is be the rise of the Fight for 15 movement, which advocates that when low wage workers get higher pay, everyone wins. And there have been several states and municipalities who are enacting minimum wage-boosting laws for just that reason.