No fast food company has been caught committing wage theft as many times as Subway, according to a CNN Money review of Labor Department records.
Subway stores have been found guilty of 17,000 separate violations of the Fair Labor Standards Act stemming from over 1,100 separate investigations since the year 2000. That is the most wage and hour violations of any fast food company, although other companies would top the list on a per-location basis.
The sandwich chain’s status as America’s leading wage and hour violator comes as something of a surprise given that most of the recent focus on wage theft has centered on McDonald’s, Burger King, and Wendy’s. A recent survey found that nine of every 10 workers at those chains has been denied pay for time they worked or experienced other forms of wage theft such as being made to clock out but stick around when things aren’t busy. Those companies pay their CEOs more than a thousand times better than their workers, while also overseeing rampant theft of those low wages. Fast food is a major driver of the broader wage theft epidemic, which robs more money from people each year than every store holdup and bank robbery combined.
But the Department of Labor has taken to working directly with Subway’s corporate parent company to stem the chain’s wage theft epidemic, according to CNN. That government effort highlights one of the tricky things about fighting wage theft at giant corporations. Because most fast food stores are operated by individuals using franchise agreements rather than by the brand itself, the law generally treats them as small businesses. It is hard to hold Subway Corporate legally liable for wage theft committed by its franchisees, and fast food companies in general enjoy a smokescreen against Labor Department investigators and the sorts of massive fines that recent wage theft lawsuits have produced against franchisees.
The Labor Department calls these slippery liability relationships “fissured workplaces,” and CNN reports that it is “intensifying its focus” on investigating the relationship between wage theft and franchising, independent contracting, and other liability-limiting arrangements. Such investigations could bring the federal government’s enforcement powers to bear on the wage theft epidemic in low-wage industries. Considering that state and local efforts have a limited effect even when workers manage to prove violations and win judgments, federal involvement might do much.
But it is not the only recourse for workers looking to tie localized lawbreaking to the corporations that ultimately profit from it. A series of class-action lawsuits filed in three states last month look to hold McDonald’s corporate responsible for the actions of its franchisees. The parent company installs the computers systems that franchisees use to implement their wage theft schemes, according to the lawsuits, and thus can be held legally liable.
These novel approaches to wage theft might not be necessary if companies were not so fixated on squeezing profits out of their own workers. A variety of companies have chosen to take a higher road, paying workers well above minimum wage and in some cases providing substantial health benefits as well, and proving in the process that companies don’t have to be ruthless to be profitable.