Stiff Penalties In Wage-Theft Case Imposed On Restaurant

The wage-theft law that took effect last year has resulted in the conviction of a West Village hookah lounge, for allegedly underpaying its employees and firing two employees reporting violations to the authorities.

Moutaz Ali, the proprietor of the hookah lounge called, Verandah, was found guilty of paying his employees, most of whom were immigrants, below minimum wage. He did not pay them their due overtime pay, even though the rules mandates that overtime compensation must be given at one and half times the regular pay.

Verandah will have to pay $150,000 as compensation to its employees who received wages below the minimum wage whilst $50,000 in compensation would be paid to the sacked employees for lost wages, damages and penalties for wrongful termination.

The settlement also bars Veranda from retaliating against the employees who cooperated with the investigation and that its employment practices would be observed and monitored for the next two years.

Moutaz Ali the proprietor, himself an immigrant from Egypt, accepted that although he had not been “100 percent in compliance with the labor laws, its really sad that we’re being framed as a greedy monster that goes around stealing people’s hard work and people’s money. We’re trying to make ends meet and make a living like everybody else.”

Mr. Ali felt that the settlement was harsh and that he had wanted to contest the charges, but decided to settle since he did not have the requisite documents to authenticate his case.

Attorney General Eric Schneiderman, expressed apprehension at the widespread wage theft occurances, especially in industries, where many immigrants work and said, “My office will aggressively pursue employers who fire workers for standing up for their rights — especially during tough economic times, when so many workers are already afraid of losing their jobs.” “By scaring employees into silence, employer retaliation undermines basic labor law protections,” he said, justifying the settlement.

“In industries that form the backbone of the emerging economy – retail, service, restaurants, construction – noncompliance with the basic protections of New York labor law is often the norm, not the exception,” said Deborah Axt, legal director for Make the Road, New York, the law firm that fought on behalf of the workers. The stiff penalty will help deter dishonest employers and protect law abiding ones.