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Post date: May 8 2014

A.G. Schneiderman Announces $20k Settlement With Airport Contractor For Shortchanging Minimum-Wage Workers In NYC

Air Serv, Which Operates Nationally, Underpaid 300 Low-Paid Wheelchair Attendants Working At NYC Airports; Will Pay Full Restitution Plus Penalties

Schneiderman: Hardworking New Yorkers Surviving On Minimum Wage Must Not Be Shortchanged

NEW YORK – Attorney General Eric T. Schneiderman today announced a settlement of almost $20,000 with Air Serv Corporation, a commercial airline industry contractor operating at John F. Kennedy International Airport and LaGuardia Airport in New York City, for underpaying nearly 300 minimum-wage wheelchair attendants. The bulk of the settlement funds, nearly $16,000, will be distributed to the attendants whose wages were not increased by the company when the state’s minimum wage rose to $8 an hour, from $7.25 an hour, on December 31. Under the agreement, Air Serv must pay $4,000 in penalties to New York State.

Instead of raising the attendants’ wages, Air Serv unilaterally reclassified the workers as tipped employees. At the same time, Air Serv, which is headquartered in Georgia and operates at airports across the nation, failed to comply with New York State’s requirements that allow for the lower tipped wage.

“Minimum-wage employees must be paid a legal wage and not a lower tipped wage unless their employer has complied with all the legal requirements for taking a tip credit,” Attorney General Schneiderman said. “My office will be vigilant and take action to protect minimum-wage and other low-wage workers. These New Yorkers, who struggle to survive, must not be shortchanged by their own employers.”

The assistants, who are hired to help airline passengers needing wheelchair assistance, were underpaid from December 31 until the end of March. On December 30, the day before the minimum wage increased by 75 cents, Air Serv advised the wheelchair attendants of an immediate change of policy whereby they would be considered tipped employees and, for that reason, would continue receiving $7.25 per hour and not the higher minimum wage.

Although state law allows employers to pay tipped employees a lower rate defined by law, employers may only do so when employees’ weekly average tips reach a certain set threshold amount that varies by industry; for wheelchair attendants, that amount is $1.20 per hour. If employees do not receive a weekly average of $1.20 per hour, the employer may not reduce wages by the tip allowance and must pay the full minimum wage.

Starting December 31, 2013, Air Serv took a tip allowance, although virtually no wheelchair attendants' tips reached a weekly average of $1.20 per hour. As a result, Air Serv underpaid employees a total of $15,954.36. That total will be paid as restitution pursuant to the Attorney General's agreement. 

In addition to payment of restitution funds and penalties, Air Serv will designate a compliance officer responsible for ensuring the proper use of the tip credit. For 18 months, this compliance officer will furnish the Attorney General’s Office with quarterly reports for any quarter during which a tip allowance is taken in order to ensure that tip credits are taken only when permitted by law. 

According to its website, Air Serv is contracted to provide services, including wheelchair, baggage handling and skycap services, at more than 50 airports, including 27 of the nation’s top 40 markets.

The case was handled for the Attorney General’s Office by the Labor Bureau’s Assistant Attorney General Kevin Lynch and Bureau Chief Terri Gerstein. The Executive Deputy Attorney General for Social Justice is Alvin Bragg. First Deputy Attorney General of Affirmative Litigation is Janet Sabel.

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