Franchise Kickback Scam
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Franchise Kickback Scam

New evidence has emerged that franchise giant 7-Eleven may be continuing to exploit workers worldwide by ignoring local minimum wage laws, just days after an investigation into the company’s systemic wage-fraud practices was recently completed. Fairfax media is reporting that a former employee, Bharat Khanna, claims that workers at 7-Eleven are continuing to be underpaid.

Khanna claims, that after exposing employee underpayment, he was fired from the 7-Eleven where he worked. Khanna said, that the company was complying with local minimum wage laws and Visa requirements for limiting the number of hours worked, but that employees, once paid, were forced to go to their ATM’s and withdraw cash to “kick back” to the store owner. Employees, typically those working on Visa restrictions, have been threatened with being fired or deported if they fail to capitulate to the scheme. It is reported that in some instances, employees have been required to hand back one-half of their wages in cash to the franchise owner.

Khanna also stated, that the scam targets immigrant workers who are new to a country and desperately need work and therefore are willing to comply with the cash kick-back scheme. Khanna has set up a toll-free number for employees to call and report 7-Eleven franchisees that are requiring the cash kick-back as a condition of continued employment.

There is growing sentiment in the federal government to clean up wage fraud across the entire franchise industry and that 7-Eleven’s ignoring previous orders will provide the impetus to do so. New legislation is being prepared that will attempt to hold head offices and parent companies financially responsible for franchisees complying with local minimum wage laws. The new law is proposed to target companies that underpay their workers or pay full wages, only to demand a cash kickback.

According to Fairfax Media, Fair Work Ombudsman Natalie James said “there is a real prospect we will take further legal action against 7-Eleven operators.” and “there is a need for meaningful penalties that will act as strong deterrents”.

To its credit, 7-Eleven corporate directors have vowed to do whatever it takes to stamp out wage fraud on the part of its franchisees stating, “7-Eleven, as a result of improved detection, prevention, investigation, and risk management capabilities is aware that a small number of franchisees are seeking to flout the system. Any wrong doing will be pursued vigorously.”