A.G. Schneiderman Announces $40,000 Settlement With Southern Tier Limo Service Over Wage Theft

Coachmaster Transportation Must Pay $20,000 To Employees Whose Tips Were Skimmed And $20,000 In Civil Penalties

Schneiderman: Making New York More Affordable For The Middle Class Starts With Standing Up For Workers

BINGHAMTON - Attorney General Eric T. Schneiderman today announced a settlement to resolve an investigation of a Broome County area limo service for failing to pay tips to drivers. The limo service, against state law, retained for "administrative purposes" a portion of the tips which passengers intended to give to drivers.  The settlement requires the company to pay $20,000 in restitution to workers and a $20,000 civil penalty, and also to comply with the law going forward.

“Making New York more affordable for the middle class starts with standing up for workers,” said Attorney General Schneiderman. “Employers must not take any portion of their employees' tips.  My office will prosecute those who engage in wage theft and fight to protect the hard-earned wages of everyday New Yorkers.”

The investigation revealed that since at least 2008, Coachmaster asked consumers making reservations for transportation services whether they would like the driver gratuity to be included on the final invoice, instead of paying the gratuity directly to the driver at the time of service.  When asked, Coachmaster would suggest 15% as an appropriate gratuity.  However, Coachmaster did not pay all of those tips to the drivers, and instead retained approximately one-third of the tip amount for its own purposes.  Consumers were never told that a portion of the gratuity included on a final invoice was going to be retained by the company.  

New York’s Labor Law and regulations specifically prohibit an employer from retaining any portion of gratuities meant for employees. 

As a part of the settlement, Coachmaster has agreed to pay restitution to affected employees in the amount of $20,000.  The company will also pay a civil penalty of $20,000. 

The case was handled by Assistant Attorney General Michael J. Danaher, Jr. of the Attorney General’s Binghamton Regional Office. The Binghamton Regional Office is led by James E. Shoemaker, Assistant Attorney General in charge. The Binghamton Regional Office is part of Division of Regional Affairs led by Marty Mack, Executive Deputy Attorney General for Regional Affairs.

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