A number of pizza delivery drivers have recently begun delivering something new: lawsuits. Unlike pizzas, these lawsuits will likely leave their recipients with a bad taste in their mouth.
The lawsuits were delivered to Papa John’s and Domino’s franchise owners in Georgia, and accuse them of violating the Fair Labor Standards Act’s “kickback rule.” This rule requires employers to make sure that their employees do not earn less than minimum wage once their out-of-pocket expenses have been subtracted from their wages. So, if an employer pays a delivery driver minimum wage, but the driver spends $10 on gas, the employer must reimburse the driver $10 so his total wages do not fall below what he should make under the minimum wage.
This rule applies to virtually all workers paid hourly wages. The purpose of the rule is to make sure that employees receive the full amount of wages owed to them. If delivery drivers paid minimum wage have to spend their own money in order to perform their job, they are not really earning minimum wage unless these expenses are reimbursed.
The lawsuits against the Papa John’s and Domino’s franchises allege that delivery drivers were not reimbursed enough for their out-of-pocket expenses enough to be paid minimum wage. They also allege that the franchise owners failed to pay the drivers for overtime work. Under the Fair Labor Standards Act, any employee working overtime, which is more than 40 hours a week, must receive one-and-a-half times his normal rate of pay.
Calculating whether a delivery driver is actually making minimum wage is not that easy. An employer must take the driver’s wage, add to it the amount he has made in tips, and then subtract from that figure the driver’s out-of-pocket expenses incurred on the job. Employees may exaggerate the amount they have driven while underreport the amount of their tips.
If possible, an employer may want to consider just paying delivery drivers, or any employee who incurs out-of-pocket expenses, a little bit more than minimum wage and reimbursing them for their expenses in order to avoid violating the kickback rule. The federal minimum wage is currently $7.25 per hour, and Illinois’s minimum wage is $8.25. You can see the minimum wage in a number of other states by clicking here.