Subway enters into “model” enforcement agreement with DOL
This just came out via various sources including Twitter and Politico, outlining the details of a new “model agreement” for enforcement of wage enforcement actions.
This quote from Dr. David Weil may be the most telling single line of the attached blog post.
“Our work with Subway breaks new ground in how we can work with the regulated community — not only with employers, but with franchisors, suppliers, retailers and others — to channel their influence to ensure that all employers along a supply chain or otherwise linked in commerce play by the rules.”
Vigorous enforcement has always helped the Wage and Hour Division drive compliance in the modern workplace, but we recently added a creative partnership to our menu of tools by signing a cooperative agreement with Subway, the world’s largest franchisor.
In short, the agreement serves our two missions and codifies our shared interests. Subway, like every franchisor, is committed to protecting the integrity and identity of its brand. Our mission is to protect workers’ paychecks. The agreement serves those two objectives by boosting franchisees’ compliance with labor laws, and helping us to ensure that workers get paid the wages to which they are legally entitled.
The larger context of this agreement is that the restaurant industry demonstrates significant compliance problems. Last year alone, the Wage and Hour Division found more than $38 million in back wages for nearly 47,000 restaurant workers – almost exclusively due to minimum wage and overtime violations. And with a total of 7.3 million employers covered by our laws, the Wage and Hour Division must strategically pursue its mission to ensure employees are properly paid for their hard work.
As we remain grounded in that mission, we’re exploring new and innovative opportunities to shape compliance behavior in the modern workplace and creative partnerships have become critical to raising compliance with basic labor standards.
Our work with Subway breaks new ground in how we can work with the regulated community — not only with employers, but with franchisors, suppliers, retailers and others — to channel their influence to ensure that all employers along a supply chain or otherwise linked in commerce play by the rules. This agreement takes collaboration to the next level; we’re not simply stating our good intentions and agreeing that everyone has an interest in complying with the law. We’re using our limited resources to affect the most good.
Specifically, the agreement builds upon the division’s ongoing work to provide technical assistance and training to Subway’s franchisees. It also provides an avenue for information-sharing where we will provide data about our concluded investigations with Subway, and they will share their own data with us, generating creative problem solving and sparking new ideas to promote compliance.
When circumstances warrant, the franchisor will remind franchisees of the Wage and Hour Division’s authority to investigate their establishments and to examine records. It also specifies that Subway may exercise its business judgment in dealing with a franchisee’s status within the brand, based upon any history of Fair Labor Standards Act violations. The agreement provides a model for exacting compliance, at scale, in an industry that has experienced problems.
There is not a one-size-fits-all workplace, so our multi-faceted approach must constantly evolve to keep pace. We have an obligation under the law to ensure that employers operate in compliance – and this agreement represents a new alternative to help us accomplish that mission.
Our collaboration with Subway can be a recipe for success, demonstrating how government and industry can work together to solve common problems. In doing so, we protect vulnerable workers and ensure a fair day’s pay for a fair day’s work.