New York Attorney General Eric T. Schneiderman yesterday announced the resolution of 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 who did not receive overtime pay as required by law, in addition to paying $50,000 in restitution for damages, lost wages, and penalties for wrongfully terminating the other two workers. Attorney General Schneiderman stated that his “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.”
The investigation by the Department of Labor revealed that Veranda failed to pay many employees 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 at 130 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.
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.