Domino’s is under fire for allegedly not paying its pizza delivery drivers minimum wage.[1] According to a new class action lawsuit, some of Domino’s drivers are receiving less than minimum wage. Despite being paid at least $7.25 an hour, the lawsuit claims that the drivers are below the minimum wage because Domino’s is not adequately reimbursing the drivers for their travel expenses. Is this legitimate?

The Fair Labor Standards Act (“FLSA”) generally does not require that companies reimburse their employees for travel or other work-related expenses. However, there is one exception – the so-called “kickback rule.”[2] Under FLSA regulations, an employee’s wages must be final, with no strings attached. In other words, if an employee is required to pay back a portion of his wages, directly or indirectly, and this “kick back” takes that employee under the minimum wage, the employer has violated FLSA’s minimum wage requirement.

For example, if a minimum wage employee spends $10 a week to fuel his or her car for business-related travel, and is not reimbursed for that expense, federal law considers that employee to be making less than minimum wage pursuant to the FLSA kickback rule.

South Carolina employers should carefully review their reimbursement practices, particularly with respect to employees close to minimum wage, to ensure compliance with the FLSA kickback rule. Any work-related expense incurred by an employee that would take the employee below the minimum wage must be reimbursed.

[1] http://www.law360.com/articles/634851/domino-s-franchisee-underpaid-drivers-flsa-suit-says.

[2] 29 C.F.R. § 531.35.