Subway, the world's largest fast-food franchisor, has agreed to improve the training of its franchisees and to punish store owners who flout federal wage and labor laws, as part of an agreement with the Labor Department.
The "cooperative agreement" comes several years after Subway was tagged as one of the worst wage violators, in an industry known for its problems adhering to federal laws.
Under the agreement, Subway will boost training and help the Labor Department monitor compliance with federal laws. It calls on the franchisor to crack down on franchisee violations of the Fair Labor Standards Act.
Subway has also agreed to remind its franchisees that the federal government is allowed to examine their records to make sure they are following the law.
"When circumstances warrant, the franchisor will remind franchisees of the [Labor Department's] Wage and Hour Division's authority to investigate their establishments and to examine records," David Weil, administrator of the department's Wage and Hour Division, said late Monday.
Weil said the agreement serves the purpose of both Subway and the Labor Department.
"Subway, like every franchisor, is committed to protecting the integrity and identity of its brand," Weil said. "Our mission is to protect workers' paychecks. The agreement serves those two objectives by boosting franchisees' compliance with labor laws, and helping us to ensure that workers get paid the wages to which they are legally entitled."
Last year, Labor's Wage and Hour Division found that more than $38 million was owed to almost 47,000 restaurant workers.
Weil said the deal with Subway "breaks new ground" on how companies and he government can work together to ensure compliance.