A.G. Schneiderman Announces Conviction Of Manhattan Restaurateur For Underpaying Workers $100,000

Paul Hurley, Owner Of Desmond's Steakhouse & Grill Was Convicted Of Failing To Pay Workers At Famed 7th Avenue Eatery And Was Sentenced To Pay Restitution

Schneiderman: Employers Cannot Finance Their Economic Ventures On The Backs Of Their Employees

NEW YORK - Attorney General Eric T. Schneiderman today announced the conviction and sentencing of Paul D. Hurley and Portmarnock Restaurant Corp., d/b/a Desmond's Steakhouse & Grill, for failing to pay wages to workers who were hired at various stages during the opening of the 7th Avenue restaurant. Hurley and the corporation were each convicted of Failing to Pay Wages as an unclassified misdemeanor under Section 198-a(1) of the New York State Labor Law. At the time of his plea, Hurley admitted to shortchanging 54 workers out of $100,000 by falsely promising them that they would be paid in the future to induce them to continue working without wages during the opening nights of the posh eatery.

“Employers cannot finance their economic ventures on the backs of their employees,” said Attorney General Schneiderman. “Asking employees to forego the payment of wages to aid a restaurant in its opening is unacceptable and the failure to pay them for the back wages once the restaurant has established itself as a prime New York eatery is reprehensible.”

Hurley, 49, of New Rochelle and his corporation were sentenced earlier today in Manhattan Supreme Court before the Honorable Charles H. Solomon. He and the corporation were sentenced to pay $100,000.00 in back wages as restitution, $3,989.00 in Unemployment Insurance Contributions to the New York State Department of Labor, and a conditional discharge. The $100,000.00 has been turned over to the Office of the Attorney General for distribution to the workers. Hurley is the sole owner of Desmond's Steakhouse and Grill located at 515 7th Avenue.

Employees were hired from October 2012 through February 2013 to prepare the restaurant for its opening on February 25, 2013. The restaurant opened, and employees worked for weeks without pay. By the beginning of April 2013, the employees, including managers, chefs, administrative staff, and servers, were owed more than $100,000.00 During this time, Hurley asked his employees to stay on without pay during the opening of the restaurant based upon his promise that they would be paid in full once the restaurant established itself as a first class dining destination. Hurley reneged on his promise and legal obligations, even though the business began to thrive. As a result of this gross inequity, many of his employees stopped working in April of 2013.

Under New York State's minimum wage laws in 2013, employers were required to pay $7.25 an hour (as of December 31, 2014 the New York State Minimum Wage has increased to $8.75 per hour) and overtime at one and a half times their rate of pay for hours worked in excess of 40 hours a week. The law also requires that manual workers, such as wait staff and kitchen staff, be paid weekly and within 7 days of the date that wages were earned.

According to the indictment and plea entered by Hurley and Portmarnock Restaurant Corp., d/b/a Desmond's Steakhouse & Grill a general manager is owed $31,157.00 for work from October 2012 to April 2013 and at least twelve other employees who are owed in excess of $2,000.00 for uncompensated work. By the beginning of April 2013, Desmond's Steakhouse & Grill had approximately 54 employees who were owed a total of $100,000.00.

The investigation was conducted by Investigator Edward Ortiz and Supervising Investigator Luis Carter, under the supervision of Deputy Chiefs Kenneth Morgan and Vito Spano and Chief Dominick Zarella.

The case is being prosecuted by Labor Bureau Assistant Attorney General Matthew Ross, under the supervision of Labor Bureau Criminal Section Chief, Richard Balletta, Labor Bureau Chief Terri Gerstein, Executive Deputy Attorney General Alvin Bragg, and Executive Deputy Attorney General Kelly Donovan.

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