Restaurant Chain Joins Alliance on FLSA Compliance

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By Michael Trimarchi

An agreement was reached between the fast-food restaurant chain Sonic and the Labor Department to help the company's independently owned and operated franchise locations comply with federal wage and hour laws.

As part of the voluntary agreement signed July 27, Sonic Corp. would provide a forum and the resources needed to assist the department's Wage and Hour Division in helping franchise owners and managers comply with the Fair Labor Standards Act and other labor laws.

The agreement was similar to one the division reached in 2016 with Subway IP Inc. to provide compliance assistance and training materials. Subway agreed to share enforcement data with federal officials and explore how scheduling and payroll technology could be used to avoid overtime violations at its restaurants.

Quarterly Meetings, Training

Sonic is the country's largest drive-in chain with about 3,500 restaurants, most of which are locally owned and operated.

Under the agreement, which does not absolve Sonic of liability for potential violations, the company would meet once a quarter with officials of the Wage and Hour Division “to share information about concluded cases, to identify upcoming opportunities for training, to discuss new regulatory developments, or to generate new ideas for enhancing FLSA compliance throughout Sonic restaurants,” the agreement said.

The company also would, upon request by the division, alert franchisees of Section 11(a) of the FLSA, which authorizes Labor Department officials to “investigate and gather data concerning wages, hours, and other employment practices; enter and inspect an employer’s premises and records; and question employees to determine whether any person has violated any provision of the FLSA.”

Among the 20 largest fast-food companies, Sonic was investigated most frequently by the division, with about 7 percent of its stores having at least one audit from 2009 to 2016, a Bloomberg BNA analysis showed.

At least one FLSA violation was found in 70 percent of those audits, the analysis showed.

To contact the reporter on this story: Michael Trimarchi in Washington at mtrimarchi@bna.com. To contact the editor responsible for this story: Michael Baer at mbaer@bna.com.

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