KEVIN NATHANIEL FOX, Magistrate Judge.
On April 11, 2013, Wei Yan Yan commenced this action for unpaid minimum wage and overtime compensation against 520 Asian Restaurant Corp. d/b/a Chef Yu and Teo Su Jin ("Douglas")
The only evidence the plaintiff introduced at trial was his testimony. The plaintiff testified through his affidavit that he was employed by the defendants "from June 2006-September 2012," and "[i]n June 2006 Teo Su Jin hired me and told me to report to the Restaurant daily at 11:00 a.m., which I did." However, in his deposition, the plaintiff stated that he was hired on "July 5, '06," and that he remembered that date because he had "a habit of making records," which he acquired when he had his "business in Flushing for about seven years," and his restaurant business abroad "for about eight years." The plaintiff failed to explain the inconsistency of his deposition testimony about July 5, 2006, the date he was hired by the defendants, with his trial testimony, that he was hired and started working for the defendants in June 2006.
The plaintiff testified that the defendants "required me to use an electric motor scooter/bicycle to do my job making deliveries for the Restaurant." He stated: "I owned a motor scooter when I was first hired, and during the years I worked for the Restaurant from 2007-September 2012 I bought additional eight electric motor scooters, for an average cost of $800 each." He also stated that he "spent an average of $100 a month in repairs and maintenance," and, "from April 2007-September 2012," he "spent $6,400 to purchase scooters for the Restaurant's deliveries, and $6,600 to repair and maintain them." However, at his deposition, the plaintiff testified that: (a) "[e]ver since I started at this business or restaurant, I did use my bicycle to make delivery"; (b) he purchased "the bike because of his job"; and (c) he "[b]ought a lot of it. A lot, a lot of it because of the need for my job." When asked on cross-examination why he used, repeatedly, the term "bicycles" during his deposition if he was referring to "motor bikes," the plaintiff became evasive and did not answer; instead he stated that he purchased "electric bikes" and "in overall general terms it's the same."
In the parties' joint pretrial order, the plaintiff stipulated that he was required by the defendants "to use and own and maintain a bicycle." In his April 7, 2014 letter to the Court, sent pursuant to Rule 3B of the Court's Individual Rules of Practice, the plaintiff submitted Exhibit A, his calculation of damages. In that document, the plaintiff requested $5,000 in damages for "BIKE MAINTENANCE DAMAGES (ESTIMATE)." However, in his post-trial submissions, the plaintiff submitted Exhibit A, his calculation of damages, seeking $13,000 for "BIKE MAINTENANCE DAMAGES (ESTIMATE)." The plaintiff failed to explain the inconsistency of his deposition testimony about the bicycles and his pre-trial calculation of related damages, estimated to be $5,000, with his trial testimony about "electric motor scooters (bicycles)" and his post-trial calculation of related damages, estimated to be $13,000.
The plaintiff also testified that he "did not use these scooters for personal use," and he "used public transportation to commute to work and kept his scooter at the Restaurant when I was not using it for deliveries." However, when asked whether he ever took his "bicycle from home to [the] subway station," he answered: "Very infrequently, almost no." The plaintiff did not explain the inconsistency between his statement that he did not use the bicycles for personal use with his statement that he did use them to commute, although "[v]ery infrequently."
The plaintiff testified that he reported to work daily at 11:00 a.m. He explained that, when going to work, he left home at 9:30 a.m. and traveled on the No. 44 bus, for about 20 minutes, to the train station, where he would take the No. 7 subway train, and that to travel from his home to where he worked, it took him "about hour and a half." Of that one "hour and a half," nearly one hour was spent traveling "from Main Street Flushing Station to the restaurant," because he "[b]asically" took the local No. 7 subway train, since no express No. 7 subway train operated after 10:00 a.m. However, the plaintiff also testified that he did not take the express No. 7 subway train because sometimes no seat was available to him and sometimes he would smoke a cigarette outside the train station before entering it; thus, the express train would not be running any longer.
The plaintiff was evasive when pressed to answer simple and clear questions about his commute to work and he provided confusing answers. Nonetheless, after he explained how he traveled to work from his home by the No. 44 bus to the Main Street subway station in Flushing and used, "basically," the local No. 7 subway train to Manhattan, the following colloquy ensued:
The plaintiff's testimony about his commute to work is contradictory and incredible.
The plaintiff testified that he owned a business in which he and his family "cooked and served and did all the work . . . with no other employees," and that he "was not familiar" with the minimum wage. At his deposition, the plaintiff stated that when he had his own business, he had an employee and he paid the minimum wage to that employee. The following colloquy ensued at trial:
The plaintiff testified that, "[f]rom July 2006-July 2008 I worked 7 days a week, twelve hours a day." At his deposition, he stated that, in July 2008, he was in the hospital for two days due to an injury. When asked about the discrepancy between stating that he worked seven days a week in July 2008 and that he was in the hospital for two days in July 2008, the plaintiff stated that he "rested for two days" at home, "not the hospital." The following colloquy ensued:
The plaintiff's evasiveness and his repeated unwillingness or inability to explain discrepancies between his deposition and trial testimonies about numerous issues, including those critical to determining his damages, are the bases for the Court's rejection of the plaintiff's testimony, in its entirety, as incredible.
Douglas testified at the trial. The Court finds that his testimony was credible. Douglas stated that the plaintiff was hired to work six days per week and was paid $350 semi-monthly. However, shortly after the plaintiff started working, he agreed to work seven days per week until March 2007, when Douglas hired additional employees. The plaintiff was paid an additional $20 per week, in cash, during the period when he worked seven days per week. In 2008, the plaintiff's semi-monthly payments were increased to $500, which is the amount he was paid for the remainder of his tenure with the defendants.
Douglas testified that the plaintiff worked alternate weeks on two weekly work schedules, called "early week" and "late week." During the early weeks, the plaintiff was scheduled to work from 11:30 a.m. to 9:30 p.m., Monday through Friday, with two half-hour meal breaks beginning at 3:00 p.m. and 8:00 p.m. During the late weeks, the plaintiff was scheduled to work from 11:30 a.m. to 11:00 p.m., Monday through Friday, with a two-hour break beginning at 3:00 p.m. and a half-hour break beginning at 8:00 p.m. During both the early and late weeks, the plaintiff was scheduled to work from 11:30 a.m. to 11:00 p.m. on Sundays, with two half-hour meal breaks beginning at 3:00 p.m. and 8:00 p.m. During the five or six months that he worked seven days per week, the plaintiff was scheduled to work those same hours on Saturdays.
Douglas testified that, when they make deliveries, deliverymen keep all the cash tips tendered by the defendants' customers. When customers paid for meals using credit cards, the restaurant paid the plaintiff 100% of the tips charged on the customers' credit cards. Douglas explained that approximately 60% of the restaurant delivery orders, including tips, are paid by credit cards, and the restaurant never deducted the credit card commissions it was charged from the tips that the plaintiff earned. According to Douglas, American Express charges the restaurant a 2.9% commission on all payments that the restaurant's customers charge on that card, MasterCard charges a 2.5% commission and Visa charges a 2.5% commission. Douglas testified that, starting in October 2009, all employees were paid by check. He explained that the defendants' Exhibit A is a document indicating payments to the plaintiff, from July 2009 through September 2012, with the plaintiff's signature confirming each payment received. Douglas maintained that the defendants paid both the employer and employee tax on the plaintiff's earnings in 2009, 2010 and the first half of 2011, when the defendants reverted to paying the plaintiff in cash.
The Court adopts the parties' stipulated facts as its findings of fact:
The defendants paid credit card company commissions on the plainitff's tips for him. The defendants' payments to the plaintiff did not vary based on his hours worked. In addition to this pay from the defendants, the plaintiff received approximately $1,400 per month in tips from customers in 2007, and approximately $2,000 per month beginning in 2008.
The plaintiff was required to own, use and maintain a bicycle to perform deliveries for the defendants. The defendants did not reimburse the plaintiff for the purchase and maintenance of his bicycle. Employee FICA (Federal Insurance Contributions Act) tax and Medicare tax owed by the plaintiff, in the total amount of $4,112.88, were paid by the defendants as follows: (a) $440.90, allocable to the final 265 days of 2007; (b) $612.00, in 2008; (c) $1,530.00 in 2009; and (d) $1,529.98, in 2010.
In addition to the parties' stipulated facts, the Court finds the following:
The plaintiff worked alternate weeks on two weekly work schedules, referred to as "early weeks" and "late weeks." During the early weeks, the plaintiff worked from 11:30 a.m. to 9:30 p.m., Monday through Friday, with two half-hour meal breaks beginning at 3:00 p.m. and 8:00 p.m. During the late weeks, the plaintiff worked from 11:30 a.m. to 11:00 p.m., Monday through Friday, with a two-hour break beginning at 3:00 p.m. and a half-hour break beginning at 8:00 p.m. During both the early and late weeks, the plaintiff worked 11:30 a.m. to 11:00 p.m. on Sundays, with half-hour meal breaks beginning at 3:00 p.m. and 8:00 p.m. During the five or six months that he worked seven days per week, the plaintiff worked those same hours on Saturdays. The defendants furnished meals to the plaintiff. The defendants did not maintain payroll records and they did not provide wage and hours-related notices to the plaintiff. The defendants failed to post notices at their restaurant explaining the laws governing wages and hours. At all relevant times, the defendants acted willfully.
"Every employer shall pay to each of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, . . . not less than" $5.15 an hour beginning September 1, 1997, $5.85 an hour, beginning on December 24, 2007, $6.55 an hour, beginning on December 24, 2008, and $7.25 an hour, beginning on December 24, 2009. 29 U.S.C. § 206(a)(1)(C). "`Tipped employee' means any employee engaged in an occupation in which he customarily and regularly receives more than $30 a month in tips." 29 U.S.C. § 203(t).
Meals are included within the meaning of "other facilities" furnished by an employer to her employees for the purposes of 29 U.S.C. § 203(m).
"[N]o employer shall employ any of his employees . . . for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed." 29 U.S.C. § 207(a)(1). "The regular rate of pay at which the employee is employed may in no event be less than the statutory minimum." 29 C.F.R. § 778.107. "The `regular rate' under the Act is a rate per hour," unless an employee's earnings are determined on another basis. 29 C.F.R. § 778.109.
Every employer is required to: (1) maintain and preserve payroll or other records indicating,
"[D]elivery workers [who] were required to purchase bicycles, which were used and specifically required for their delivery work," are entitled to be "reimbursed for the costs of the bicycles and the necessary repairs, and because they were paid below minimum wage, they are entitled to recover damages for those amounts."
"Any employer who violates the provisions of section 206 or section 207 of the [FLSA] shall be liable to the employee or the employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages." 29 U.S.C. § 216(b). However,
An FLSA action "may be commenced "within two years after the cause of action accrued, . . . except that a cause of action arising out of a willful violation may be commenced within three years after the cause of action accrued." 29 U.S.C. § 255(a).
"Unless otherwise provided by law, the following number of hours shall constitute a legal day's work . . . [f]or all . . . employees, except those engaged in farm work and those affected by subdivision four of section two hundred twenty of this chapter, eight hours." NYLL § 160(3). "The basic minimum hourly wage rate shall be: $7.25 per hour" on and after July 24, 2009, until and including December 30, 2013, and $7.15 on and after January 1, 2007, until and including July 23, 2009. New York Compilation of Code, Rules and Regulations Title 12 ("NYCRR") § 146-1.2, § 137-1.2. "An employer may take a credit towards the basic minimum hourly rate if a service employee or food service worker receives enough tips and if the employee has been notified of the tip credit as required in section 146-2.2 of this Part." NYCCRR § 146-1.3.
"New York does not have a mandatory overtime law."
"No employer shall make any deduction from the wages of an employee, except deductions" authorized by law, rule or regulation. NYLL § 193.1;
"When tips are charged on credit cards, an employer is not required to pay the employee's pro-rated share of the service charge taken by the credit card company for the processing of the tip. The employer must return to the employee the full amount of the tip charged on the credit card, minus the pro-rated portion of the tip taken by the credit card company." NYCRR § 146-2.20. "Meals and/or lodging provided by an employer to an employee may be considered part of the wages paid to the employee." NYCRR § 146-1.9.
Every employer shall provide her employees: (a) a notice explaining the rates of pay, as well as the basis thereof and allowances claimed as part of the minimum wage, including tips and meals,
Prior to April 8, 2011, New York Labor Law required that "an additional amount as liquidated damages equal to twenty-five percent of the total amount of wages found to be due" be awarded. NYLL § 198(1)(1-a). "[T]he statutory remedy of an award of . . . the liquidated damages . . . where a willful failure to pay wages has been established, [is] limited to actions for wage claims founded on the substantive provisions of Labor Law article 6."
The Court finds that the defendants violated the provisions of sections 206 and 207 of FLSA, and they are liable to the plaintiff in the amount of his unpaid minimum wages and overtime compensation. The plaintiff is entitled to be reimbursed for the costs of the bicycles he used for his work and the necessary repairs made to those bicycles. The Court finds that the defendants also violated NYLL article 6, and they are liable to the plaintiff for the amount of his: (i) unpaid minimum wages; (ii) overtime compensation; and (iii) spread of hours. The defendants are liable to the plaintiff for damages he incurred commencing from April 11, 2007, under New York Labor Law, and April 11, 2010, under FLSA.
"Even when a default judgment is warranted based on a party's failure to defend, the allegations in the complaint with respect to the amount of the damages are not deemed true. The district court must instead conduct an inquiry in order to ascertain the amount of damages with reasonable certainty."
The plaintiff is entitled to the minimum wage for 56 hours per week, overtime compensation for 16 hours per week and compensation under the spread of hours provision of New York law, for 3.5 hours per week, during the statutory period April 11, 2007, to September 2012.
The defendants are not entitled to use the tip credit against the plaintiff's minimum wages under FLSA because they failed to inform him about the provisions of 29 U.S.C. § 203(m). They are not entitled to use the tip credit against the plaintiff's minimum wages under New York's Hospitality Industry regulations, for the period commencing January 1, 2011. However, New York's Minimum Wage Order in effect prior to January 1, 2011, did not require an employer to give an employee notice, as a condition for taking a tip credit.
Douglas testified that meals were furnished to the plaintiff by the defendants and he saw the plaintiff eat meals furnished by the defendants, "from time to time." Since meals were furnished to the plaintiff, they may be considered part of the plaintiff's wage, and the defendants are entitled to receive credit for furnishing two meals per day as follows: (a) $4.90 per day, prior to July 24, 2009; and (b) $5.00 per day, starting July 24, 2009.
The plaintiff failed to present any credible evidence to support his request for bicycle purchase and maintenance damages. Thus, no basis exists upon which to ascertain an amount of damages for the cost of purchasing and maintaining bicycles.
Penalties are warranted for the defendants' failure to provide requisite notices under New York law. The penalties may not exceed a total of $2,500 per year, for each of the years 2011 and 2012, resulting in a total penal amount of $5,000.
The Court finds that the defendants' calculation of damages, Docket Entry No. 36-1, totaling $30,008.81, which includes $25,008.81 in minimum wage, overtime compensation and spread of hours damages and $5,000 in penalties, for failing to provide requisite notices under New York law, is reasonable and appropriate for an award in this case.
The defendants failed to show, to the Court's satisfaction, that the conduct giving rise to this FLSA action was undertaken in good faith and that they had reasonable grounds for believing that their conduct was not a violation of FLSA. Therefore, the plaintiff is entitled to liquidated damages under FLSA in an amount equal to the amount of the minimum wage and overtime compensation, owed during the three-year statutory period: 2010, 2011 and 2012. The amount of liquidated damages under FLSA is $11,734.55.
The defendants also failed to show they had a good faith basis to believe that their underpayment of wages was in compliance with the law. The plaintiff is entitled to liquidated damages, under New York law, in the amount of $15,011.91; this amount includes 25% of $13,329.19 and 100% of $11,679.62. The total liquidated damages under FLSA and New York law to which the plaintiff is entitled is $26,746.46.
"It is well settled that in an action for violations of the Fair Labor Standards Act prejudgment interest may not be awarded in addition to liquidated damages."
The Court finds that the plaintiff is entitled to prejudgment interest, under New York law, computed at the rate of nine percentum per annum upon $30,008.81, namely $2,700.79, from a single reasonable intermediate date: April 11, 2010. Accordingly, the plaintiff is entitled to three years of prejudgment interest in the total amount of $8,102.37.
Postjudgment interest is governed by the federal statute providing that "[i]nterest shall be allowed on any money judgment in a civil case recovered in a district court." 28 U.S.C. § 1961(a). Interest is calculated "from the date of the entry of the judgment, at a rate equal to the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the calendar week preceding []the date of the judgment," and is "compounded annually." 28 U.S.C. §§ 1961(a), (b). The plaintiff is entitled to postjudgment interest, as noted above.
For the foregoing reasons, the plaintiff is entitled to damages as follows: (1) $30,008.81, in damages; (2) $26,746.46, in liquidated damages; (3) $8,102.37, in prejudgment interest; and (4) postjudgment interest.
SO ORDERED.
