Another New Haven grocery store — and Yale tenant — was shuttered this week after the Connecticut Department of Labor discovered multiple counts of labor violations.
The state DOL issued a “Stop Work” order against J & B Deli on Monday for failing to pay their workers the minimum wage and overtime compensation. Investigators found that the owners, John and Cheong Rhee of Hamden, Conn., had also improperly paid workers in cash, failed to keep adequate payroll records and failed to provide workers’ compensation and other benefits required by law. The owners, as well as the two men they employ, dispute the wage theft charges.
“This business was flying in the face of basic tenets of the law,” Gary Pechie, director of the DOL’s Wage and Workplace Standards Division, said. He said his division received eyewitness reports Tuesday morning that the deli had opened in violation of the “Stop Work” order, a breach that costs owners $1,000 each day a business is open contrary to such an order. A $300 fine is assessed for every day that an employee works while not on proper payrolls.
The deli, located at 1147 Chapel St., opened again Tuesday at 5 p.m. in violation of the order, Rhee said.
In an interview Tuesday evening in the deli, Rhee said the investigation is the result of a misunderstanding, an explanation his two employees corroborated in a subsequent interview in the deli’s kitchen.
“[The investigators] are telling me I only paid them $400 per week, but no … I’m a fair guy,” Rhee said. “I’ve never paid $400 — much more. I have proof.”
Rhee protested that he is “not a slaver” as the investigation suggests, adding “they are my friends and my family.”
Rhee said he has always paid his employees above the minimum wage, and that he currently pays his two employees $690 for a 60-hour week, not $400, as he said the DOL is alleging.
Out of earshot of their employer the two workers, Sergio and Jesus, said in Spanish that they are compensated $690 per week. Taking into account overtime, $690 per week would meet the required minimum wage of $8.70 an hour. Rhee said both employees are undocumented immigrants from Mexico.
Sergio and Jesus expressed disbelief at the idea that their employer was exploiting them.
“I wouldn’t be here if there were exploitation,” Jesus said. “If there were abuse, I would accept the help.”
Sergio agreed, saying “for me it’s that I have work and that I’m respected. I’m very happy working for him.”
Both said they preferred cash to check payments. They also said they are allowed paid vacation and frequent breaks.
Sergio said the DOL investigators did not speak adequate Spanish, which he said made it hard to communicate during the interview. Both Sergio and Jesus insisted that they tried to tell the investigators that they were paid $690 per week.
Rhee attributed what he described as a “misunderstanding” to fear.
“He was afraid. He was afraid that somebody was going to take him … he just gave that number,” Rhee said in reference to the weekly wage of $400 he said he is being accused of paying his employees.
Pointing to hand-written records signed by the two employees, Rhee acknowledged that he was behind on record-keeping. He said he has to pay his workers in cash and cannot provide the required insurance owing to the employees’ undocumented status.
“If they don’t receive their money, how come they would sign this?” Rhee said in reference to the hand-written papers attached to a clipboard.
Rhee said he had to open the store on Tuesday to generate enough revenue to cover his costs. “We lost thousands over the past two weeks when students were gone, and now we need to pay the $1,000 fee for this morning,” he said.
Multiple customers were frequenting the store on Tuesday evening. The DOL “Stop Work” order was clearly taped to the front door.
Pechie said the investigation is ongoing. When asked if the owners were cooperating, he said that “depends on your definition of cooperation.” In order to reopen the business, he said, owners must present the state with appropriate payroll records and prove that they are abiding by state workplace regulations. So far, the deli’s owners have made no move to do that, Pechie added.
Reached again Tuesday evening, Pechie said DOL officials will be on the scene Wednesday to assess the situation.
J & B’s run-in with the DOL follows wage-related incidents at other area businesses. The workplace violations alleged at J & B come one month after the owner of Gourmet Heaven, the 24-hour convenience store and deli, was arrested on counts of non-payment of wages, defrauding immigrants and non-payment of overtime wages. The labor violations at Gourmet Heaven, which has locations on Broadway and Whitney Avenues, were first unveiled last summer.
Rhee said he was aware of the Gourmet Heaven incident and that his case is “not like that.”
J & B, like Gourmet Heaven, is a tenant on property owned by Yale University and managed by its University Properties office. Rhee said he has been in the Chapel Street location for 13 years.
The University responded to the DOL announcement Tuesday by condemning unlawful labor practices.
“We were disappointed to hear of this and if these allegations prove true, we will continue to address this issue with our tenants and look for ways to eradicate this unacceptable treatment of employees,” Lauren Zucker, Yale’s associate vice president of New Haven Affairs and University Properties, said in an email. She added that University Properties had just “recently reminded all of our tenants that they need to understand and observe all aspects of state and federal wage and labor laws.”
Zucker did not return request for further comment Tuesday evening on when J & B’s lease expires. Rhee said he has another three-and-a-half years. He said his chief concern is that the legal issues will cause Yale to pull the lease on him.
After a meeting on Monday with New Haven’s Board of Alders, Vice President for New Haven and State Affairs Bruce Alexander ’65 said Gourmet Heaven’s lease expires in two years. To renew that lease, Alexander said, owner Chung Cho would “have to show us that he has a completely different attitude about [labor practices].”
Alexander called wage theft “inconsistent with the values of our institution.”
Pechie said the practices are not only ethically bankrupt but unfair to other businesses that follow the letter of the law. He said the investigation is part of a broader effort to crack down on labor malfeasance throughout the state.
He said neighboring New Haven businesses can expect “periodic stops” by DOL investigators.
“We’re trying to send a message that you have to play by the rules,” Pechie said.
Connecticut’s minimum wage is slated to rise to $9 an hour beginning in 2015 and could climb to $10.10 by 2016.