Municipal Government

Papa John’s Franchisee Convicted of Wage Theft

November 25 2015
By Stephanie West

New York NY – Attorney General Eric T. Schneiderman announced the conviction and sentencing of Abdul Jamil Khokhar and BMY Foods, Inc., which together owned and operated nine Papa John’s franchises throughout the Bronx.Khokhar pled guilty to failure to pay wages under the New York Labor Law, a misdemeanor, and BMY Foods pled guilty to falsifying business records in the first degree, an E felony.

  Khokhar was sentenced to jail time and to pay $230,000 in restitution to underpaid workers at his Papa John’s franchises.“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,” said Attorney General Schneiderman.  “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.”Both New York and federal law require employers to pay workers at least the 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. 

New York’s current minimum wage is $8.75 per hour, and the federal minimum wage is currently $7.25 per hour; employers in New York must pay the higher rate.  In addition, employers must report all wages paid to employees on tax returns on a quarterly basis and must make contributions to the State Unemployment Insurance Fund based upon the reported wages.Khokhar and BMY Foods, Inc. failed to pay overtime to their workers.  Instead, they paid workers the same, “straight time” regular rate of pay for all hours worked, including hours in excess of forty and they created fictitious names for employees to use in their computerized timekeeping system to hide this practice.

In a further attempt to conceal this scheme, the defendants filed fraudulent tax returns with the State of New York that omitted the cash payments made under fictitious names.  Khokhar created the dual name scheme after becoming aware that he was under investigation by the U.S. Department of Labor for wage violations. “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,” said Mark H. Watson, Jr., Regional Administrator for the Wage and Hour Division at the U.S. Department of Labor.

November 24, 2015

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