Domino’s sued, accused of underpaying

ALBANY, N.Y. — New York’s attorney general has sued Domino’s Pizza Inc. and three franchisees alleging they underpaid workers based on payroll reports generated by the parent company’s computer system.

“We’ve uncovered rampant wage violations at Domino’s franchise stores, and intensive involvement by Domino’s headquarters that caused many of these violations,” New York Attorney General Eric Schneiderman said Tuesday. “At some point, a company has to take responsibility for its actions and for its workers’ well-being.”

Schneiderman said the company knew since at least 2007 that its payroll software undercalculated gross wages while still encouraging franchisees to use it.

The suit filed Monday night in state Supreme Court in Manhattan alleges the three franchises and the company, as joint employers, underpaid workers at least $565,000 at 10 New York stores. It also seeks to determine full restitution owed to workers, a court finding that Domino’s defrauded its franchisees and violated state law, and a monitor to ensure future compliance.

The Ann Arbor, Mich.-based company called Schneiderman’s lawsuit disappointing, saying it “disregards the nature of franchising and demeans the role of small business owners.” The company said it has worked with his office for three years trying to help franchises comply with New York’s complex wage laws.