March 1, 2012
NYC Nightclub Resolves Illegal Pay Practices, Retaliation
NEW YORK– The Attorney General’s Office has resolved an investigation of Veranda, a restaurant and lounge in Manhattan that underpaid approximately 25 workers and terminated two employees who questioned the company’s illegal pay practices.
As part of the settlement with the Attorney General, Veranda will pay $150,000 in restitution for employees who were paid below the minimum wage and did not receive overtime pay as required by law, in addition to $50,000 in restitution for damages, lost wages, and penalties for wrongfully terminating the other two workers.
New York State’s minimum wage is $7.25 per hour, and under the state’s overtime requirement, employers must pay workers 1 ½ times their regular rate of pay for each hour they work past 40 in a given week. When certain conditions are precisely met, employers may pay a tipped employee a slightly lower hourly wage rate. However, managers and others who do not serve the public may not take a portion of tips received.
It is illegal for employers to retaliate against workers who report violations of labor law. The Wage Theft Prevention Act, effective in April of last year, created additional remedies for workers who have experienced retaliation, including liquidated damages of up to $10,000 per instance of retaliation. A significant portion of the settlement attributable to retaliation is based on new remedies available only under the new law.
The investigation revealed that Veranda failed to pay many employees the minimum wage and overtime, and that Veranda illegally distributed tips to the manager. It also showed that Veranda fired two employees shortly after they participated in a group complaint, made to Make the Road New York, about the company’s illegal pay practices.
The settlement bars Veranda, located at130 7th Avenue in Greenwich Village, from retaliating against employees perceived to have cooperated with the investigation or employees who will be receiving unpaid wages under the settlement. In addition, the restitution amount reimburses employees for tips that were taken by the club manager, in violation of federal and state labor laws. The Attorney General’s office will continue to monitor Veranda’s employment practices for the next two years.
Complaints in this case were referred to the Attorney General’s Office by the advocacy group Make the Road New York.
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