KFC Franchisee Cheated Employees

May 11, 2015
By Stephanie West

Eric T. Schneiderman

New York, NY – Attorney General Eric T. Schneiderman has announced a $375,000 settlement with KFC Corporation franchisee Divine Investors, LLC, which operates 13 stores in Brooklyn, Queens and Upper Manhattan. Under the settlement, the company and its owner Hiren Patel have agreed to pay restitution for several labor law violations.

These include requiring employees to continue to work after they clocked out and not paying all required overtime. More than 700 current and former employees are eligible for restitution under this settlement.

“This KFC franchisee ignored certain basic laws protecting his low wage workers, and this is simply not acceptable, said Attorney General Schneiderman. “In New York, we have one set of rules for everyone, and all employers must comply with our labor laws. I will continue to do everything in my power to protect fast food and other low wage workers in New York from wage theft.”

Schneiderman’s office found that the franchisee regularly failed to properly pay employees at more than one location who clocked in excess of 40 hours per week.

According to Schneiderman, the company, at times, required employees to continue working after clocking out. KFC also failed to pay employees “uniform maintenance allowance,” required under the Labor Law when employers require employees to wear uniforms at work, and failed to provide laundry service or sufficient numbers of uniforms. Workers were never paid “spread of hours” pay, an additional hour of pay required by the Labor Law for shifts in which the interval between the start and end time was longer than 10 hours. In addition, personnel were not paid “call-in pay,” or compensation for being called in to work and then being sent home before clocking in or being sent home early.

"Finally we're getting some restitution for the way we were treated on the job," said Shenita Simon, a mother of four who worked at a KFC franchise owned by Patel from 2011 to 2014. "No one deserves to be intimidated on the job or have their wages stolen. This settlement is proof that when workers join together, we're able to hold our employers accountable to the law. It is a good first step in ensuring that all low-wage workers in New York State are treated with dignity and respect."

More than 700 current and former employees are eligible to receive restitution from the $375,000 settlement fund, which covers the period of November, 2011, to September, 2014. After the investigation began, Patel purchased an additional 27 KFC locations in New York under different corporate names. Those 27 locations will also be subject to future compliance requirements of the settlements.

Since 2011, Attorney General Schneiderman has successfully secured over $20 million in restitution for more than 17,000 workers across New York, while also recovering over $2 million in restitution and penalties for the state.

May 9, 2015

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