Human Resources News & Insights

It can happen to anyone: Biz owner gets jail time for wage violations

Most wage-and-hour violators are met with fines and damage penalties. But it’s also possible to go to jail for them. Is there anything scarier than that? 

Abdul Jamil Khokhar will serve 60 days in jail and pay $510,000 in restitution, damages and penalties for pay violations committed by himself and BMY Foods Inc., which together owned nine Papa John’s franchises throughout the Bronx in New York.

Following investigations by the DOL and New York Attorney General’s office, Khokhar pleaded guilty to failing to pay wages under state law, a misdemeanor, while BMY pleaded guilty to falsifying business records, a felony — hence the jail time.

“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 New York Attorney General Eric Schneiderman in a statement released by his office.

Khokhar and BMY’s employees routinely worked more than 40 hours a week, but were only paid “straight time” for all of the hours they worked, officials said.

The statement released by Schneiderman’s office also said that Khokhar and BMY tried to hide this practice by creating fictitious names for employees and recording the overtime work under those names. The duo then filed fraudulent tax returns with the State of New York that omitted the cash payments made under fictitious names to actual employees.

Khokhar was accused of creating the scheme after the DOL started investigating him for wage violations.

In a settlement with the DOL, Khokhar agreed to pay $230,000 in liquidated damages and $50,000 in civil monetary penalties for his actions. Khokhar was also sentenced by a court to pay another $230,000 to Schneiderman’s office in restitution for the unpaid wages and serve the two months in prison.

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