The owners of Colony Diner in East Meadow, New York were sentenced on November 14 to pay $338,000 plus $64,000 in fines and back taxes for intentionally underpaying their employees.
The U.S. Department of Labor began investigating the diner in late 2010. Based on employee interviews, the agency found out that the wait staff was being paid $2 an hour or less, the bus staff was paid off the books from the wait staff's tips and the kitchen staff was never paid overtime pay, despite working 50 to 60 hours a week. The Labor Department found that the owners kept two separate books: one that contained falsified payroll and time records and another that recorded the true pay rates and hours worked. The false records also showed that only 11 to 15 people worked at the diner, when there were really 35 to 40 people working in any given week.
The owners could have faced up to four years in prison, but a Nassau County judge sentenced them to a three-year conditional discharge on the condition they pay full restitution to the victims and all fines and back taxes.
State and Federal law mandates that wait staff be paid $4.65 per hour, while bus and kitchen staff must be paid the minimum wage $7.25 per hour, with overtime wages of $10.875 per hour for every hour worked over 40 hours per week.