Restaurants Violate Labor Laws

Taste of Thai and Tamarind, two Ithaca restaurants owned by Ariya Pancharoen, were found to have violated numerous labor laws following an investigation conducted by the New York State Labor Department, according to a press release issued by the Department of Labor yesterday.
The DOL, working in conjunction with the Tompkins’ County Workers’ Center, discovered that 36 workers were affected by these violations and were cumulatively underpaid $28, 388.
In addition to being fined for these violations, Pancharoen has agreed to pay each of the workers in three monthly payments. The Taste of Thai workers received their first payments on Nov. 15, 2008, and the Tamarind workers collected theirs on Jan. 15, 2009.
The investigation began with an anonymous tip that the DOL received in May 2008. Initially, only Taste of Thai was examined, but when investigators found out that the same individual also owned Tamarind, the inquiry expanded to scrutinize operations at both restaurants.
The investigation uncovered four primary violations — the restaurants refused to pay overtime even to employees who worked over the 40-hour-per-week minimum; the management illegally collected the tips each day and distributed them amongst the workers; the management did not keep accurate time and payroll records; and many employees were not granted the minimum legal requirement of one day off per week. Many employees at the restaurants were immigrants who do not speak English. The investigation was therefore conducted with the aid of a Thai interpreter.
In addition to the anonymous tip, two employees at the two restaurants stepped forward to address the management and work with the TCWC to put an end to the violations committed by Pancharoen at his two restaurants.
Deidra Cross was a former employee at both Taste of Thai and Tamarind.
“I started noticing things I didn’t think were right,” Cross said.
Despite her reservations concerning her job security, Cross confronted the management in January 2008 about some of their operations that she did not believe were fair to the employees.
Cross stated that before speaking out against the management, she was an employee in perfect standing. Cross was fired on June 5, 2008 under the suspicion of stealing silverware, which she denied.
Pete Meyers, coordinator of the TCWC, believes the violations uncovered in these two restaurants are part of a serious problem of wage theft. In New York, $24.6 million was recovered for 17,000 workers in 2008, according to a press release issued by the TCWC. Meyers said that these statistics are only “the tip of the iceberg.”
In addition to Taste of Thai and Tamarind, there have been other examples of wage theft and other labor violations in Ithaca, according to the press release.
To prevent recurrences of these violations, Geovanny Triviño, the Immigrant Community Liaison Bureau of Immigrant Workers’ Rights for the DOL, said in the press conference, “We’re going to be watching these establishments to make sure they’re complying.”
Triviño commented on how, in this current economy, it is imperative to make sure all workers receive their rightful wages.
Many of those in attendance at the press conference expressed fears that the penalties imposed on the owner of the restaurant were not strict or severe enough to prevent future violations. Triviño acknowledged that some of the fines might be a little too low, but he maintained that the DoL would be keeping an eye on the two restaurants for compliance with labor laws.
Some in the audience noted that the employees at the two restaurants were not part of any union and posed the question of whether the passage of the Employee Free Choice Act would make it easier for the employees to prevent such maltreatment. The Act would “would enable working people to bargain for better wages, benefits and working conditions by restoring workers’ freedom to choose for themselves whether to join a union,” according to America’s Union Movement.
Cross remarked that it would be difficult to form an effective union with the employees at the two restaurants. She noted that Ithaca is a college-town where many employees are part-time workers enrolled in either Cornell or Ithaca College, limiting any time the employees could devote to being a union member.
Prof. Ron Ehrenberg, industrial and labor relations, said in an e-mail, “Because of fear of being fired, nonunion employees are less likely to report possible violations. So one strong role of unions is to monitor laws, such as the Fair Labor Standard Acts, which governs minimum wages and overtime behavior and the like. Early studies done more than 20 years ago, including one that a student and I did of compliance with the Overtime Pay Act, found compliance was much higher in unionized workplaces. So more collective bargaining coverage and/or devoting more resources to compliance activities by governments would both lead to higher compliance.”
In addition to not being in a union, the employees at Taste of Thai and Tamarind might not have been aware of their rights. Meyers said that restaurants are required to tell workers of their rights, including alerting them to the minimum wage rate. Triviño added that restaurants are obliged to post certain notifications about employee rights. Cross noted that the employees were never informed of any rights, nor were there any postings of such rights in the restaurants.
While the owner is in the process of paying back his workers, Matt Peterson, another worker at Taste of Thai, said that one change that has been implemented is the workers’ control over the tips. Before the investigation, the management would collect and distribute the tips, but now the workers have complete control over the tips.