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Lenny’s Sandwich Shops to Pay $5.1 Million for Wage Violations

Tuesday, June 14, 2011

 The New York State Department of Labor has reached a $5.1 million settlement, its largest ever, with the chain Lenny’s: The Ultimate Sandwich for minimum-wage and overtime violations, Gov. Andrew M. Cuomo announced on Tuesday.  The violations affected more than 800 workers at 11 locations throughout Manhattan who, between 2002 and 2008, were “cheated out of millions of dollars,” according to a statement from the department.

Investigators found that employees were regularly paid less than the minimum wage (currently $7.25 an hour) and were not paid overtime. Employees earned an average of $275 per week, working 10 to 12 hours a day, six to seven days a week, investigators found. They should have been paid at least $500 each week.  The settlement includes $100,000 in penalties to the state, with the remaining $5 million going to the workers, said Leo Rosales, a department spokesman. Workers will receive amounts ranging from $24 — for uniforms they shouldn’t have been forced to buy — to $91,000 for long-time workers, he said.

Ronald B. Kremnitzer, a lawyer at Pryor Cashman who serves as outside general counsel for Lenny’s, said the company, which now has 13 stores, all in Manhattan, “has worked closely” with the Labor Department investigators. “Lenny’s is now and has been for some time fully compliant with the Department of Labor requirements,” he said. Lenny’s has already paid a $1 million down payment, and will pay the rest of the settlement over the next two years.  The investigation began during the summer of 2008, after the department received a tip. Three years later, workers have started to receive their first post-settlement checks.

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