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A.G. Schneiderman Announces Settlement With Manhattan Restaurant Owner Who Underpaid Employees And Kept Tips Meant For Delivery Workers

Workers Delivered Food To Customers That Ordered Through Websites Delivery.Com, Grubhub.Com, And Seamless.Com.

Schneiderman: It Is Outrageous That A Business Would Cheat Its Workers And Hoodwink Customers

Attorney General Eric T. Schneiderman revently announced a $15,000 settlement with the owner of two Manhattan restaurants for wage underpayments. The owner, Wallace Lai, admitted to a number of labor law violations, including keeping tips intended for delivery workers after customers ordered through online delivery services.

Lai formerly owned two Chinese food restaurants, both called Hong Kong Station. From May 2014 until January 2015, the restaurants delivered food to customers through the food delivery websites Delivery.com, GrubHub.com, and Seamless.com. Through those websites, customers paid with credit cards, typically including a tip for delivery workers. Lai unlawfully kept the tips charged through the sites – never paying them to the delivery workers as customers intended.

“Delivery workers travel at all hours of the day and through all kinds of weather to provide food to customers who can order from their homes with the click of a button,” said Attorney General Schneiderman. “It is outrageous that a business would cheat its workers and hoodwink customers, by keeping tips that are meant for these hardworking employees.”

The settlement agreement requires Wallace Lai to pay $15,000 for the full amount of tips that he kept from customer orders on the food delivery websites and for minimum wage and overtime violations. The restitution will be distributed to approximately ten workers who formerly worked at Lai’s restaurants.

New York Labor Law prohibits employers from keeping any part of the tips that are intended for service employees, including delivery workers. Under the law, Lai and his restaurants were required to distribute tips to the workers who provided the service that customers are tipping for. The law both protects the earnings of low-wage service employees, and ensures that consumers are not defrauded by a business that keeps gratuities meant for workers.

This matter was handled by Assistant Attorney General Haeya Yim under the supervision of Deputy Bureau Chief ReNika Moore. Terri Gerstein is the Labor Bureau Chief, and Alvin Bragg is the Executive Deputy Attorney General for Social Justice.