DOL cracks down on New Haven businesses

isaacstanleybecker_J&Bdeli-4
Photo by Isaac Stanley-Becker.

In the wake of Gourmet Heaven’s high-profile wage theft investigation, the Connecticut Department of Labor (DOL) is conducting sweeps of downtown New Haven businesses to sniff out workplace violations.

Gary Pechie, head of the DOL’s Wage and Workplace Standards Division, said the Gourmet Heaven incident was not the sole reason for the sweeps, formally known as “compliance audits.” He said his division is reacting to calls from advocates who have informed him that wage theft is a widespread issue among New Haven businesses.

“Gourmet Heaven is an indicator of what could be going on,” he said. “Advocates are encouraging us to do more enforcement. We’re not finished, but I hope we don’t find any cases as egregious.”

As of this February, almost all of the stop-work orders the DOL had issued in New Haven for failure to provide workers with coverage went to construction companies, contractors and developers, with one major exception: Gourmet Heaven.

Since March, however, the DOL has issued roughly a dozen stop-work orders to restaurant and mercantile businesses in downtown New Haven, estimated Resa Spaziani, supervisor of the DOL’s fraud unit. The DOL accomplished this by inspecting businesses and interviewing workers to determine that work conditions, wages and workers’ coverage were in compliance with state regulations.

DOL investigator Blair Bertaccini, who led the Gourmet Heaven investigation, appears to have made good on his promise in February that “New Haven is making wage theft a priority.”

J&B Deli, which rents from Yale University Properties, and Chap’s Grille were among those recently shuttered for labor violations. Six other businesses canvassed by the News in and near the Broadway strip said they had not been inspected.

These sweeps are not localized to New Haven, however. Investigators are visiting towns and cities across the state, including Hartford, to conduct similar audits. Spaziani said the Department plans to return to New Haven for a second round of inspections soon.

Pechie insisted that the DOL was making every effort to educate business owners on how to fall into compliance with regulations. Still, one small business owner — who preferred to remain anonymous because his business received a “stop-work order” — said the agency was unfair in its demands. He said he was asked to produce large amounts of paperwork that he did not have on hand without any prior notice.

“Large manufacturers and companies don’t get these stop-work orders because they have strong lawyers,” he said. “This hurts small businesses.”

Spaziani said the greatest number of complaints alleging workplace violations come not from employees at the restaurants themselves, but rather from competing businesses who are following the law and want an even playing field. She said employers pay around 30 percent more if they observe proper protocol for payrolls, making them resentful of business owners who cheat the system.

“There was a public outcry,” she said. “Businesses that don’t follow payroll regulations are forcing legitimate businesses to pick up the slack.”

Spaziani said the recent spike in stop-work orders issued to restaurants was also the result of new partnerships the DOL has formed with various other agencies including the Occupational Safety and Health Administration, the Department of Revenue and the Liquor Control Division.

John Lugo, an Unidad Latina en Accion (ULA) activist who led the charge against Gourmet Heaven, said that the case showed many workers the extent of their legal protections and empowered them to pursue complaints against their employers.

“This case made workers aware they have rights and that they can do something about wage theft,” he said. “Now, workers are not waiting to get in contact with ULA before reporting exploitation.”

Still, many workers are intimidated into silence by their employers, who often will “coach” them into lying to DOL investigators, Pechie said.

When the DOL shut down J&B Deli for three days in March, workers told DOL investigators and the News that they were being paid $690 for a 62-hour workweek, but further investigation revealed that they were being paid about 100 dollars less, placing them under the state’s minimum wage.

The deli, like the other restaurants that were shuttered downtown, is now open and in compliance with regulations, said store owner John Rhee.

Gourmet Heaven workers told the News in November that the deli’s management coerced them into lying to DOL investigators by threatening them with termination or cut hours. They originally told investigators that they were being paid the minimum wage and working 40 hours a week.

In November, a group of workers came forward anonymously to the DOL to report that they were being paid as low as $4.44 an hour. When their identities were discovered, four of them were fired in retaliation, and others saw their hours cut.

The United States Department of Labor is now investigating the deli’s two locations in Providence, R.I. because the state has no DOL of its own. Pechie said his division is aiding the federal agents’ efforts to bring justice to workers in Providence.

Though Connecticut’s workers are protected under a state-level DOL, Spaziani said the Wage and Workplace Standards Division’s enforcement is undercut by a lack of personnel to conduct sweeps and to investigate the thousands of complaints they receive each year.

“Three of us issued stop work orders to 1300 businesses in the past 5 years, but we often have to pull people from other units,” she said. “It’s not sustainable to have so few. Other states have whole forces — if we had 10 more people that could really make a difference, but as it is, we do what we can.”

Gourmet Heaven was issued a “stop-work” order on Aug. 7.

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