New York Domino’s Delivery Drivers Underpaid for Expenses, Lawsuit Alleges

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The operators of certain Domino’s Pizza franchises in New York face allegations that they have failed to properly reimburse delivery drivers for vehicle operation costs.

According to a proposed class and collective action, Domino’s delivery drivers employed by defendant JMC Holdings, Ltd. and its owner are reimbursed for business expenses—including the costs of gasoline; vehicle parts and fluids; repair and maintenance; insurance; depreciation and other out-of-pocket costs—at “unreasonably low” rates that fail to properly approximate the actual costs of operating their vehicles to deliver Domino’s pizza and other food items.

Per the suit, expenses that go unreimbursed to delivery drivers constitute an illegal “kickback” to the Domino’s franchisee such that the workers’ wages are not paid “free and clear of all outstanding obligations.” The case argues that the defendants’ failure to reasonably approximate delivery drivers’ expenses causes their wages to fall below the federal and state minimum “during some or all workweeks.”

According to the suit, the IRS business mileage reimbursement rate, which is supposed to represent a reasonable approximation of the cost of owning and operating an automobile, ranged between $0.535 and $0.58 per mile during the time period at issue. Moreover, the driving conditions associated with delivering pizza, including frequent stopping and starting of the engine, frequent braking, short routes and driving under time pressures, cause drivers to incur even higher maintenance and repair costs and more rapid depreciation than the average driver, the suit stresses.

Nevertheless, the defendants’ reimbursement rate falls well below the IRS rate or any other reasonable approximation of drivers’ expenses, according to the complaint. The plaintiff, who worked as a delivery driver at a Poughkeepsie, New York Domino’s, says he was reimbursed just $0.30 per mile. Using the lowest IRS business mileage rate as an approximation of the plaintiff’s expenses, the lawsuit estimates he was underpaid by at least $0.235 per mile, which, when multiplied by the plaintiff’s average of three deliveries per hour and a roundtrip distance of roughly 10 miles per delivery, means he was under reimbursed about $7.05 per hour, according to the suit. Thus, the case says, the plaintiff’s hourly wage after subtracting his unreimbursed expenses equated to about $4.20, well below both the federal and state minimum.

The lawsuit alleges all of the defendants’ delivery drivers had experiences similar to those of the plaintiff given they were paid at or close to the minimum wage and incurred unreimbursed expenses due to the restaurant operator’s “flawed reimbursement policy.” Per the suit, the defendants’ failure to pay workers the proper minimum wage allowed JMC and its owner to “enjoy[] ill-gained profits at the expense of [their] employees.”

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