San Francisco Subway franchises under investigation for exploiting immigrant workers

The California Labor Commissioner's Office is investigating a Subway franchise in San Francisco and six other locations owned by the same couple for alleged labor law violations.

The investigation, first reported by NBC News, was prompted by claims from immigrant employees, including Khadengra Subedi, a Nepali immigrant, who reported being paid $14 an hour in cash without pay stubs and often working without breaks.

During his nine-month tenure, Subedi claims he faced late payments and had to manage the restaurant alone for long periods, often without breaks. Unaware of his rights regarding minimum wage, overtime, and sick pay, Subedi said he had no choice but to accept the conditions.

The seven Subway restaurants, all in San Francisco, are owned by one couple, Christopher Van Buren and Marta Gebreslasie, who operate two corporations that together own the seven franchises.

The current investigation came to light when a worker approached representatives from Trabajadores Unidos Workers United (TUWU) and Legal Aid at Work, leading to the identification of at least 25 affected employees over the past three years.

In May, the couple were sent a notice by the California Labor Commissioner's Office asking them to discontinue the illegal labor practices. Their wage violations spanned three counts: paying less than the California minimum wage of $16 an hour, paying less than the San Francisco city minimum wage of $18.67 an hour and paying less than the new state fast-food worker minimum wage of $20 an hour, instated in April.

A spokesperson from Subway told NBC that they "take these matters very seriously and are looking into the alleged claims." These is not, however, the first time Subway has been accused of exploitation.

A 2021 lawsuit accused the restaurant chain of preying on Asian immigrants, encouraging them to open franchises and then targeting them with unnecessary fees, causing the businesses to go under. Another lawsuit accused the owner of a Seattle Subway franchise of creating a hostile environment for Black employees.

Last year the U.S. Labor Department looked into a string of Bay Area Subway franchises revealing owners hired workers as young as 14 and 15 to work long hours and operate dangerous equipment, while also withholding tips and failing to pay regular wages. The U.S. District Court for the Northern District of California ordered the owners to pay nearly $1 million in back wages.