En Español Know Your Rights
Source: Bureau of National Affairs
Subject: Workplace Justice
Type: Media Coverage

Six New York Grocers to Pay $320,000 To Compensate 41 Baggers Paid Only Tips

Daily Labor Report – Wage & Hour


The New
York Labor Department June 2 announced that six grocery stores located in Manhattan, Brooklyn, Queens, and the Bronx
will pay $320,185 to settle claims that 41 current and former grocery baggers
were paid only in customer tips.

‘‘When
supermarket customers drop a few coins into a paper cup by the cash register
that is a tip—not a paycheck,’’ New York Deputy Commissioner of Labor Terri
Gerstein said in a statement.

 

‘‘It is
outrageous that employers would pay no wages at all and leave their hardworking
employees with an empty bag at the end of the week,’’ Gerstein stated.

 

Store Owner Said Baggers Were Not
Employees.

 

Fine Fare
Supermarket at 3131 Grand Concourse, Bronx,
N.Y.
, will pay $40,211 to 11
workers.

 

Fine Fare
store owner Luis Vargas told BNA June 4 that the baggers at his store were
indeed unpaid but that it was because they were not actually employees.

 

‘‘They were
basically three baggers because I did not consider them employees. They were
just people who insisted on hanging around and bagging for $30 or $40 a day in
tips. Basically I got screwed,’’ Vargas said.

 

Vargas said
he was never given any warning or chance to correct the situation by the state
labor department. ‘‘I guess they were doing this all over the place and I don’t
understand why we were never given any warning or anything. Originally the fine
was $80,000 but I agreed to settle for $40,000 and a payment plan,’’ Vargas
said.

 

Labor
Department spokeswoman Michelle Duffy told BNA June 4 in response to Vargas’s
comments that business owners are presumed to know the law and said his
settlement was for 11—not three—unpaid baggers.

 

‘‘We don’t
issue warnings. We assess penalties when there are violations. As long as the
employer permits [baggers] to work in the supermarket, they must receive at
least the minimum wage and overtime pay after 40 hours of work,’’ Duffy said.

 

One Owner Says He Settled to Avoid
Court Costs.

 

C-Town Food
Store at 264 East 204th Street
in the Bronx will pay $17,618 to 10 workers.

 

However,
C-Town store owner Jaime Luna told BNA June 4 that the allegations of unpaid
wages were false and he settled only to avoid litigation costs.

 

‘‘The
unpaid wages—that was their finding. I would waste more time and money [than
the settlement amount] trying to fight it in court so I agreed to settle. I
don’t even use baggers here,’’ Luna said.

 

Duffy said
the eight grocery stores involved in the investigation and settlements are all
individually owned and operated. ‘‘I have the impression many of them are just
typical neighborhood corner stores,’’ Duffy said.

 

Advocacy Group Tipped Off Labor
Department.

 

The investigation
began in 2008 when Make the Road New York, a community advocacy organization,
tipped off the department that three of the eight grocery stores were not
paying wages to the baggers, which culminated in a sweep of the eight stores,
Duffy said.

 

The labor
department said most of the stores investigated were complying with wage and
hour laws for other workers but that the baggers in a majority of cases worked
for tips only.

 

In about 50
percent of the cases, the baggers were working in excess of 40 hours per week,
with some working as many as 80 hours per week, Duffy said.

 

Duffy said
several workers will receive in excess of $25,000 but that others will receive
less than $100 from the settlements.

 

One Store Also Fined for Employing
Minors.

 

  • Pioneer Supermarket at 381 Mother Gaston Boulevard, Brooklyn, N.Y.,
    will pay out $160,451 to 12 baggers;
  • Associated Supermarket at 3907 103rd Street, Corona, N.Y.,
    will pay $49,223 to three baggers;
  • Key Food at 952 Myrtle Avenue, Brooklyn,
    N.Y.
    , will pay four workers
    $44,861 plus an additional $2,500 in penalties for employing two minors
    without a permit;
  • Food Bazaar at 452 Wyckoff Avenue, Brooklyn, N.Y.,
    will pay $5,321 to one bagger, according to the state labor department.

 

The
department estimates that an additional Pioneer Supermarket in the Bronx and an
additional C-Town Food Store in Manhattan
owe some workers approximately $400,000 in unpaid wages and overtime
compensation, but these stores are still negotiating settlements.

 

Other than
Vargas and Luna, no other store owners or store representatives responded to
BNA’s requests for comments.