Employer created phony records to cover up wage and hour violations

One business owner who attempted to line his own pockets by shortchanging his workers learned a powerful lesson: There are serious consequences to violating wage and hour laws.

A Papa John’s franchisee has been sentenced to 60 days in jail and significant financial penalties for failing to pay workers overtime, and for falsifying payroll records to cover up his unlawful actions.

Let’s take a look at what this unscrupulous employer did, and then discuss what workers should know about their compensation.

Fictitious Employees

Abdul Jamil Khokhar, along with BMY Foods, Inc., owns nine Papa John’s franchises in New York state.

According to a recent investigation by the New York Attorney General, Khokhar hit on an interesting strategy for increasing profitability at his stores: He refused to pay time-and-a-half to employees who worked overtime.

But there was one problem with Khokhar’s system. The computerized bookkeeping program for BMY Foods automatically calculated time-and-a-half for any hours worked over 40 by an employee in a given week.

However, a technological glitch wasn’t going to stop Khokhar. He developed a way to get around the system.

Khokhar created several fake employee names. The state investigation revealed that once an employee had worked 40 hours in a week, his or her hours would be entered into the payroll system using one of Khokhar’s fictitious names. That way, the payroll program would be “tricked” into paying those hours at the regular rate of pay instead of the overtime rate.

Khokhar and BMY often paid for these additional hours in cash, while keeping a separate paper trail that reflected the fictitious names, according to the investigation.

Naturally, this practice wasn’t particularly popular among the 300 or so employees who worked for Khokhar.

Someone complained.

The state attorney general and the U.S. Department of Labor got involved. They determined that not only did the company fail to properly compensate workers, it filed fraudulent tax returns to conceal its misconduct.

Khokhar was criminally prosecuted. He was sentenced to 60 days in jail. He and BMY must also pay over $500,000 in damages and restitution.

What Workers Need to Know

If you’re a non-exempt employee, you are generally entitled to overtime compensation for time worked over 40 hours in a given week.

Overtime must be paid at 1.5 times your regular rate of pay.

However, it’s important to be aware that employers who are trying to short your pay may offer intentionally confusing explanations for discrepancies in your compensation (like this one we wrote about a few month ago). That’s why, if you feel that you’re not being paid in accordance with the law, it’s a good to speak to an attorney who has experience in wage and hour violations.

Email us at murphy@phillyemploymentlawyer.com, or call (267) 273-1054 for a free consultation.