On Wednesday, October 8, 2014, The New York State Attorney General announced the arrest of Elisa Parto for failure to pay wages under N.Y. Labor Law § 198-a(1). Ms. Parto is the owner of a restaurant in Port Chester N.Y., who is accused of failing to pay some $35,000 in minimum wage and overtime pay to five former employees. Ms. Parto opened her restaurant in 2010 and hired several cooks, cleaners and cashiers, who were entitled to be paid minimum wage and one and a half times their regular rate of pay for all hours worked in excess of 40 hours a week.
Ms. Parto was charged with an unclassified misdemeanor that could result in a maximum jail term of one year and a maximum fine, in addition to the required restitution, of $5,000.00 per count. This arrest is significant because nothing suggests that the alleged misconduct was part of a continued pattern of abuse or something that was done as a conscious disregard for the law – there is no suggestion of any prior Department of Labor investigations, wilful destruction of records or any history of complaints. Simply put, within four years of opening a business, the owner may be facing jail time for failing to comply with Wage and Hour regulations.
Attorney General Eric Schneiderman explained: "My office will take aggressive action, including criminal charges, where appropriate, against business owners who fail to properly compensate their employees for hours worked. Protecting the livelihoods of hardworking New Yorkers is a priority for my office."
With such increased scrutiny, and threatened "aggressive action," small business owners need to carefully review their payroll practices. In light of yesterday's arrest, proper payroll practices are more important than ever. Small business owners be warned: the ante has been raised.
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