More than two dozen employees at a West Village hookah lounge, many of them immigrants, will be able to reclaim unpaid wages thanks to a wage protection law passed last April in New York City.
The lounge, Veranda, agreed to pay $200,000 in back wages and penalties as part of a settlement with the New York attorney general’s office.
Under the settlement, the lounge, Veranda, will pay $150,000 in restitution to employees who were paid below minimum wage and did not receive earned overtime pay, the statement said. State law mandates a minimum wage of $7.25 per hour and overtime compensation equivalent to 1½ times the regular pay rate for each hour an employee works beyond 40 hours in a week.
In addition, Veranda will pay $50,000 in restitution for lost wages, damages and penalties for wrongfully terminating the two workers who complained about the pay practices to Make the Road New York, an advocacy group that works with immigrant populations in New York.
Moutaz Ali, owner of Veranda, conceded in an interview late Thursday that he had not been “100 percent in compliance with the labor laws.” He said he had wanted to fight some of the charges but decided to settle because he did not have the paperwork to prove his arguments.
While the settlement is a personal victory for the workers, the case also served to show how the Wage Theft Protection Act could help safeguard worker rights:
The state investigation revealed that the company failed to pay many employees minimum wage and overtime, and that tips intended for the workers were illegally distributed to the manager. It also showed that Veranda fired two employees, Marco Jacal and Isidro Suarez, both Mexican immigrants, shortly after they complained to Make the Road, officials said.
Mr. Jacal and Mr. Suarez filed complaints on the same day that the Wage Theft Prevention Act took effect, said Deborah Axt, deputy director of Make the Road.
“They were exercising their rights and it became Make the Road’s test case for the brand-new anti-retaliation provisions of the Wage Theft Prevention Act,” she said.