Abdul Jamil Khokhar, owner of nine Papa John’s franchises in NYC, was sentenced to 60 days in jail and ordered to pay $230,000 in restitution for failure to pay his employees overtime.

Attorney General Schneiderman announced the conviction and sentencing, saying, “Wage theft is a crime and a Papa John’s franchisee is now going to jail for cheating his employees and trying to cover it up. My office will do everything in its power to protect the rights of New York’s workers and make sure that all employers – including fast food restaurants – follow the law.”

Mark H. Watson, Jr., Regional Administrator for the Wage and Hour Division at the U.S. Department of Labor said, “The Attorney General’s successful criminal prosecution of this employer, together with the Department of Labor’s civil consent judgment against the enterprise, show that employers will not get away with covering up violations of state and federal wage laws. We will continue to work together to prevent such law-breaking and obtain proper compensation for workers.”

You hear that, salon owners? This is as strong a warning as you’re likely to get.

These laws aren’t specific to New York. Federal laws require employers to pay workers at least the prevailing minimum wage for all hours worked, and overtime at one-and-one-half times their regular rate of pay for hours worked in excess of forty in any given workweek. Employers are also required to report all wages paid to employees on tax returns.

Khokar failed to pay overtime to his workers, instead paying them the regular rate of pay for all hours worked, including overtime. He created fictitious names for employees to use in the computerized timekeeping system to hide this practice and filed fraudulent tax returns that omitted the cash payments made under fictitious names. Clearly not a particularly bright bulb, Khokar implemented these practices after becoming aware that he was under investigation by the DOL for wage violations.

“See that fire? Let’s try and put it out with some gasoline.”

The DOL and the New York Attorney General’s office worked together to jointly investigate and prosecute Khokhar–a perfect illustration of the “hell-trifecta” I’ve mentioned previously, where both state and federal agencies will tag team exploitative employers for maximum damage.

New York and the Department of Labor are broadcasting a loud warning. Heed it.

3 COMMENTS

  1. I recently decided to take over a failing booth rental salon. I have a girl who is both a hair stylist and a nail tech. She wants to rent a booth but she also wants to do nails there and I supply the materials I am confused how to handle this situation. She would like a flat fee, any suggestion on how to handle this without muddying the lines of independent contractor

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