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Post date: May 20 2002

Brooklyn Restaurant Owners Indicted For Allegedly Failing To Pay Workers

Attorney General Spitzer today announced the indictment of a Brooklyn restaurant and its owners for failing to pay more than $16,000 in wages to six employees. Charged today in the five-count felony indictment were owner Chi Yung Lee and the Jade Plaza restaurant. This is the first felony prosecution of an employer for failing to pay required wages.

The indictment charges that since May 2001, Jade Plaza and Chi Yung Lee failed to pay six waiters and busboys approximately $16,500 in wages. The indictment further alleges that while the employees were working approximately 54 hours per week at the restaurant in Sunset Park, they were, for some weeks, paid for only 40 hours per week and for other weeks, not paid at all.

An employer who fails to pay wages is guilty of a misdemeanor violation pursuant to New York State Labor Law Section 198-a. In 1997, the state labor law was amended to provide that a second violation of the law would constitute a felony. Jade Plaza and Chi Yung Lee were prosecuted under the felony provision because in May 2001, they pled guilty to a misdemeanor charge of failure to pay wages to four of their workers. A second principal, Ka Chik Lee, was arraigned on misdemeanor charges.

"The failure to pay wages to employees is a serious crime as shown by the Legislature's upgrade of the penalty for a second violation to a felony," Spitzer said. "Employers like Jade Plaza and Chi Yung Lee, who continue to violate the law despite a previous conviction, will be prosecuted to the fullest extent of the law. My office is prepared to utilize all law enforcement measures available to ensure that workers are protected."

In the case that resulted in the misdemeanor conviction, the Attorney General's investigation had shown that the restaurant failed to pay its workers the required minimum wage of $3.30 per hour for tipped restaurant workers and also failed to pay its employees at all for any hours worked beyond forty hours per week. The misdemeanor conviction resulted in an order of restitution for back wages of $22,321. The current indictment alleges that, following the conviction and restitution, Jade Plaza came into partial compliance with the labor law by paying the minimum wage of $3.30 per hour for the first 40 hours worked, but it failed to pay wages for overtime hours and failed to pay wages at all for four weeks.

Wing Lam, the Executive Director of the Chinese Staff and Workers Association, a community group with offices in both Manhattan's Chinatown and Sunset Park said: "I applaud Attorney General Spitzer's prosecution of Jade Plaza. Wage violations are common in the restaurant industry. Employers ignore the law and think it won't catch up with them. I hope because of this action that attitudes will change and employers will comply with the law"

Nadia Marin-Molina, the Executive Director of The Workplace Project, a community workers center in Hempstead, N.Y., which drafted the bill which resulted in the felony upgrade for second violations of the wage provisions, stated: "Our members drafted this bill because they saw that non-payment of wages needed to be treated like the serious offense that it is. We believe that this felony prosecution is a first step towards ending the rampant non-payment which leaves so many workers with nothing to show for their labor."

The Attorney General also announced the arraignment today of another Sunset Park restaurant, New Ocean Empire Seafood Restaurant, Inc. and its managers Wai Hung Chan and Gen Lin Chan, on misdemeanor charges of the failure to pay wages. The Attorney General has alleged that the restaurant paid each of four waiters a flat cash wage of $300 per month for a 66 hour work week, or approximately $1.13 per hour. This resulted in a total of $18,789.12 in underpayments over a two year period.

An indictment is merely an accusation. Jade Plaza Restaurant Inc., Chi Yung Lee, Ka Chik Lee and New Ocean Palace, Wai Hung Chan and Gen Lin Chan are presumed innocent of all charges unless proved otherwise in a court of law.

The cases are being handled by Assistant Attorney General Richard Balletta and Deputy Bureau Chief Jennifer Brand of the Attorney General's Labor Bureau under the supervision of Bureau Chief M. Patricia Smith. Deputy Bureau Chief Zachary Weiss of the Criminal Prosecutions Bureau assisted in the Jade Plaza case.