AG Schneidermnan: Endicott business must pay $40,000 in wage theft settlement

By Nicky Hickling

June 2, 2014 Updated Jun 2, 2014 at 7:06 PM EDT

(WBNG Binghamton) Attorney General Eric Schneiderman announced a settlement to resolve an investigation of a Broome County limo service for failing to pay tips to drivers.

Schneiderman said Coachmaster limo service in Endicott retained a portion of the tips for "administrative purposes," against state law. Passengers intended for the tips to be given to drivers.

The settlement requires the company to pay $20,000 in restitution to workers and a $20,000 civil penalty, and also to comply with the law going forward.

“Making New York more affordable for the middle class starts with standing up for workers,” said Attorney General Schneiderman. “Employers must not take any portion of their employees' tips. My office will prosecute those who engage in wage theft and fight to protect the hard-earned wages of everyday New Yorkers.”

The investigation revealed that since at least 2008, Coachmaster asked consumers making reservations for transportation services whether they would like the driver gratuity to be included on the final invoice, instead of paying the gratuity directly to the driver at the time of service. When asked, Coachmaster would suggest 15 percent as an appropriate gratuity. However, Coachmaster did not pay all of those tips to the drivers, and instead retained approximately one-third of the tip amount for its own purposes. Consumers were never told that a portion of the gratuity included on a final invoice was going to be retained by the company.

New York’s Labor Law and regulations specifically prohibit an employer from retaining any portion of gratuities meant for employees.

As a part of the settlement, Coachmaster has agreed to pay restitution to affected employees in the amount of $20,000. The company will also pay a civil penalty of $20,000.

Coachmaster declined to comment on the settlement on Monday.

The case was handled by Assistant Attorney General Michael J. Danaher, Jr. of the Attorney General’s Binghamton Regional Office. The Binghamton Regional Office is led by James E. Shoemaker, Assistant Attorney General in charge. The Binghamton Regional Office is part of Division of Regional Affairs led by Marty Mack, Executive Deputy Attorney General for Regional Affairs.