On January 5, 2012, the New York State Attorney General’s Office announced that the CEO of a New York recycling group has pled guilty to charges that he violated New York State’s minimum wage and anti-retaliation labor laws. An investigation by the New York State Department of Labor determined that Alex Doljansky, the CEO of DRC Group, Inc., failed to pay the State-mandated minimum wage of $7.25 per hour to workers at the Group’s recycling facility. As a result, the Department issued an order requiring Doljansky and the Group to pay over $350,000 in back wages and penalties. After appealing the order, Doljansky threatened to fire any employee who testified against him at the hearing on the appeal. When four workers appeared to testify, Doljansky agreed to pay $240,000 in a settlement with the Department of Labor, but ultimately terminated the employees for their participation in the hearing. Doljansky and the Group also failed to pay unemployment insurance for several employees, filing false tax returns with the State that omitted the names of these individuals in an effort to disguise the violation.

Doljansky has pled guilty to one count of Failure to Pay Wages in Accordance with the Labor Law, and one count of Retaliation. DRC Group, Inc. has pled guilty to one count of Failure to Pay Wages in Accordance with the Labor Law, and one count of Offering a False Instrument for Filing. Both defendants have also agreed to pay approximately $30,000 in additional back wages and penalties. If the defendants fail to pay the proper minimum wage during the next six years, they will be subject to felony charges.

“To cheat workers out of their hard-earned pay and then fire them for reporting it is not only despicable, but illegal,” said Attorney General Schneiderman. “This company and its CEO will pay for flagrantly disregarding our State’s labor laws and then trying to cover up the crime.”

In addition, on January 5, 2012, the Attorney General’s Office also announced the arrest and arraignment of two New York restaurateurs who failed to pay wages to several employees, and filed false tax returns to disguise their failure to pay unemployment insurance. The Queens restaurant owners neglected to pay a chef for the three months in which he was employed and a waitress for multiple weeks of work, a violation that amounted to approximately $4,000 in unpaid earnings. Both owners have been charged with four counts of Offering a False Instrument for Filing, and four counts of Falsifying Business Records in connection with the filing of fraudulent tax returns. The employers have also been charged with four counts of Failure to Pay Wages in Accordance with the Labor Law.

Given New York State’s commitment to eliminate fraud and illegal activity, careful employers should conduct proactive audits of their employee relations and personnel policies and procedures to prevent adverse findings in any government audit. .