Why A Dairy Queen Franchisee Got Slapped With A Sizable Fine

An operator of 11 Dairy Queen franchise locations in Indiana and Michigan has agreed to pay the U.S. Department of Labor (DOL) a fine of $42,572 by November 14, 2022, according to a DOL press release. The franchisee, Indiana-based H&H Coldwater LCC, had come to the attention of the DOL for possible violations of federal child labor law. Upon investigating, the DOL reported the DQ operator had violated the law with respect to 102 children, ages 14 and 15, from among all 11 of its franchised DQ stores.

Federal law permits employers to hire children under the age of 18 (i.e. minors), including those aged 14 and 15, per the DOL. This setup is valuable to both employers and the minors who work for them, not to mention the economy overall (per Wall Street Journal). Child labor laws are intended to safeguard the health and welfare of minors who decide to work.

One way they do so is by circumscribing the industries in which minors may be employed and the work minors are allowed to perform on the job. They also limit the hours and days during which minors may work. Join us as we unpack what the law says and why the DOL found this particular Dairy Queen franchisee to be in violation, resulting in a sizable fine — albeit not nearly as sizable as the one imposed on Chipotle for violating state child labor laws in New Jersey.

The DOL has found H&H Coldwater, an operator of 11 Dairy Queen soft serve emporiums, to have violated Child Labor Regulation No. 3 with regard to 102 children ages 14 and 15, according to a Department of Labor press release issued last week. Under this law, employers cannot employ 14- and 15-year-olds for more than eight hours per day; on school days, the limit is three hours per day, according to OSHA Education Center. Further, employers aren't permitted to employ these minors for more than 40 hours a week; during weeks when school is in session, that number goes down to 18. In addition, employers are not allowed to have 14- and 15-year-olds work between the hours of 7 p.m. and 7 a.m., period. 

The DOL's press release does not specify exactly what the Dairy Queen franchisee did to run afoul of the law with regard to the 102 minors in question. However, it may be presumed that the violations were not willful, given that willful violations may be subject to criminal prosecution, per the Enforcement section of the DOL website. For willful violations, the penalty can be as high as $10,000 for each employee for whom a violation is found by the DOL. In this case, that could have set this Dairy Queen franchisee back more than $1 million. However, the DOL has agreed to accept the payment of a $42,572 civil fine from the DQ franchisee, according to their press release.