Papa John’s Operating Companies Sued Over ‘Flawed’ Delivery Driver Reimbursement Rates

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Perfect Delivery, Inc. and Perfect Delivery North America, Inc. – which operate about 21 Papa John’s pizza restaurants in the Carolinas – have been accused of failing to properly reimburse delivery drivers for the use and maintenance of their vehicles. From the complaint:

“Instead of reimbursing delivery drivers for the reasonably approximate costs of the business use of their vehicles, Defendants use a flawed method to determine reimbursement rates that provides such an unreasonably low rate beneath any reasonable approximation of the expenses they incur that the drivers’ unreimbursed expenses cause their wages to fall below the federal minimum wage during some or all workweeks.”

According to the plaintiff, drivers are reimbursed between 5% and 6% of each delivery order, which falls between $0.83 and $0.99 per delivery, on average. The suit argues that this rate amounts to much less than the IRS standard business mileage reimbursement rate. It further claims that when the cost of gasoline, repair services, insurance, and depreciation are taken into account, delivery drivers’ hourly wage comes out to about $1.65 per hour. The complaint claims that the defendants’ reimbursement policy results in their enjoyment of “ill-gained profits at the expense of their employees.”