US Labor Departments Wage and Hour Division and SUBWAY franchisor collaborate to boost restaurants compliance with federal labor laws

WASHINGTON — The U.S. Department of Labor's Wage and Hour Division and the franchisor of the world's largest restaurant chain are collaborating to increase compliance with federal labor laws at SUBWAY locations nationwide. Although these restaurants are independently owned and operated, the franchisor is providing a forum and resources to assist the division in educating franchisees.

"The SUBWAY chain has embraced the opportunity to work with the Wage and Hour Division," said acting Secretary of Labor Seth D. Harris. "Too often, franchisors ignore compliance issues among their independently owned franchised locations. This company's efforts illustrate both a commitment to the integrity of its brand and to the well-being of SUBWAY restaurant employees nationwide."

The franchisor has placed a link to the Wage and Hour Division's website on its intranet site for restaurant owners to reference, amended several of its governing documents and provided numerous other resources to help franchisees comply with labor laws. Additionally, the franchisor has agreed to enforce its rights under the franchise contract if it becomes aware of a legal disposition that a franchisee knowingly violated a federal labor law. This agreement should elevate Fair Labor Standards Act compliance to a new level of priority among franchisees.

SUBWAY headquarters is committed to facilitating a means for the Wage and Hour Division to educate franchisees on wage and hour laws. The division's emphasis on outreach and employer education will play a major role in this collaboration. SUBWAY headquarters has invited division staff to present at several of its annual meetings, published a series of articles authored by the division in its weekly electronic newsletter outlining federal minimum wage and overtime requirements under the FLSA and facilitated the division's efforts to provide FLSA posters to all new SUBWAY franchise owners. Also, division staff provided FLSA training materials to the SUBWAY headquarters corporate training department; trainers are now able to share these materials with each new class.

"We encourage other franchisors to take similar measures to ensure compliance among their franchisees," said Mary Beth Maxwell, acting deputy administrator of the Wage and Hour Division. "It just makes good business sense. Employers found in violation often must pay not only back wages but damages and penalties. The good faith efforts shown by the SUBWAY franchisor benefit the employees of franchisees, the franchisees themselves and the economy as a whole. When everyone competes on a level playing field, everyone wins."

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour as well as time and one-half their regular rates for every hour they work beyond 40 per week. The law further requires employers to maintain accurate records of employees' wages, hours and other conditions of employment, and establishes a minimum age of 18 for workers in those nonagricultural occupations that the secretary of labor finds and declares to be particularly hazardous for 16- and 17-year-old workers or detrimental to their health or well-being. The FLSA also prohibits employers from retaliating against employees who exercise their rights under the law.

For more information about the FLSA and other laws enforced by the Wage and Hour Division, contact the division's toll-free helpline at 866-4US-WAGE (487-9243). Information is also available at http://www.dol.gov/whd/.