Keith Markel, Alana Mildner Smolow and Kayla West Discuss Consequences of Wage Theft in New York Law Journal

Labor & Employment Partner & Co-Chair Keith Markel and Associates Alana Mildner Smolow and Kayla West co-authored an article in New York Law Journal entitled “Pizzeria Owner Slices a Piece of the Pie for Themselves: A Warning to New York Employers Not to Keep All the Dough.” The article discusses how recent legislation in New York has increased the civil and criminal penalties for wage theft, and therefore New York employers who fail to properly pay wages to their employees may pay hefty the consequences.

The authors point to a recent headline involving the owner and a manager of Grimaldi’s Pizzeria who allegedly stole more than $20,000 in wages from at least seven employees and were indicted for the crime of scheme to defraud in the first degree, as well as several counts of failure to pay wages in violation of New York Labor Law.

The Worker Protection Unit, which received numerous complaints from Grimaldi’s employees about the owner and manager, was created by the Manhattan District Attorney’s Office in February 2023 for this very reason. The unit is specifically tasked with investigating and pursuing criminal charges against individuals and corporations for wage theft and unsafe working conditions in Manhattan.

Since the unit was created, the New York State Legislature has passed an amendment to the New York Penal Law that expanded the definition of larceny to now include wage theft. In addition, New York Labor Law states that an initial failure to pay wages is a misdemeanor punishable by a $500 to $20,000 fine or imprisonment up to one year.

Given the scope and severity of potential criminal liability, employers are advised to remain vigilant about complying with wage and hour laws by reviewing their payment practices and utilizing tools to help maintain accurate payroll records.

New York Law Journal subscribers may read the article here.