Regulators have sent subpoenas to several Papa John’s (PZZA) restaurants in the New York City area linked to a investigation into how the locations pay their workers.
The probe appears to center whether the pizza outlets are using delivery people — who make less than the $7.25 an hour minimum wage — to perform general restaurant functions. New York authorities signaled a review of fast food operations over the question earlier this year, but had not cited any companies by name, the New York Post notes.
State law requires delivery staff who perform other duties for more than two hours in any shift to be paid minimum wage. Delivery workers and wait staff can receive as little as $5.65 an hour in regular salary if they get at least $1.60 an hour in tips under New York law.
A spokesperson for Papa John’s International noted that the company has no control over independent franchises payroll practices. The company, which has 3,100 restaurants nationwide, does not directly operate any outlets in New York. However, there are 127 franchised Papa John restaurants in the state.
According to a subpoena leaked to the Post, regulators are looking for evidence that franchise owners communicated with corporate management about hiring practices. Investigators have demanded that restaurant owners turn over documents “concerning any policy, procedure, or practice related to job responsibilities of delivery workers when not performing out-of-store deliveries of food and/or beverages to customers during a work shift.”
Last month, a California franchisee filed for bankruptcy, abruptly shuttering eight Papa John’s locations.
Shares of Papa John’s fell slightly in Friday morning trading.