Lubbock Subway Franchisee Pays Nearly $80,000 in Back Wages And Damages After U.S. Department of Labor Investigation

LUBBOCK, TX – After investigations by the U.S. Department of Labor’s Wage and Hour Division (WHD), Shiprock Enterprise LTD and Junior Senior Inc. - operator of two Subway franchises in Lubbock, Texas - has paid $79,999 in back wages and liquidated damages to 52 employees for violating the Fair Labor Standards Act’s (FLSA) overtime requirements.

WHD investigations at Subway locations on East Slaton Road and Frankford Avenue found the employer systemically violated FLSA overtime requirements when it made deductions from salaried managers’ pay when they worked less than a full day. The employer claimed an exemption from the FLSA’s overtime requirements for its salaried managers. A requirement for that exemption is that employees must be paid a guaranteed salary each workweek. The employer’s practice of reducing managers’ salaries invalidated that exemption, making them eligible for overtime. Most managers worked between 55 and 60 hours per week.  

“Employers should be aware that claiming an exemption from overtime requires that all of the criteria are met – failing to follow the rules can result in costly violations,” said Wage and Hour Division District Director Evelyn Sanchez in Albuquerque, New Mexico. “The result of this investigation should encourage other employers to evaluate their pay practices to ensure that they are in compliance. We encourage all employers to call us, confidentially, to speak with a trained Wage and Hour professional to get their questions answered.”  

The Department offers numerous resources to ensure employers have the tools they need to understand their responsibilities and to comply with federal law, such as online videos, electronic toolkits, or in-person visits to local WHD offices.

Employers who discover overtime or minimum wage violations may self-report and resolve those violations without litigation through the PAID program. For more information about the FLSA and other laws enforced by the Division, contact the toll-free helpline at 866-4US-WAGE (487-9243). Information is also available at www.dol.gov/whd including a search tool for workers who may be owed back wages collected by WHD. Employers can find additional compliance assistance information on the Wage and Hour Division website.