Judge: Diner Owners Must Pay $338K to Underpaid Employees

A judge has ordered the owners of East Meadow's Colony Diner to pay $338,000 to dozens of employees they intentionally underpaid and fork up more than $60,000 in back taxes and fines, according to the Nassau County District Attorney's office.

On Thursday, Judge Valarie Alexander sentenced cousins Tassos (Thomas) Strifas, of Merrick, and George Strifas, of East Hills, to a three-year conditional discharge on condition of payment of full restitution to the victims totaling approximately $338,000, plus back taxes and fines worth approximately $64,000. An additional $164,000 in liquidated damages will be paid to Colony Diner employees pursuant to a federal court order from January of this year.

The men, as well as their corporation Stardust Diners, Inc., pleaded guilty in April to offering a false instrument for filing and falsifying business records, both E felonies, and failing to pay wages, an unclassified misdemeanor.

As a condition of the plea, the diner owners agreed to pay underpaid minimum wage and overtime of $337,780 and liquidated damages of $163,742 to 72 employees.

District Attorney Kathleen Rice said that the Labor Unit’s investigation into the Colony Diner began in March 2011 when the office was contacted by the United States Department of Labor (USDOL) in March 2011.

The USDOL began a wage investigation into the diner in late 2010. It was revealed through employee interviews that between January 2009 and November 2011, the diner’s wait staff was being paid about $2 or less an hour, the bussing staff was being paid off-the-books from the wait staff’s cash tips and that the kitchen staff was not being paid overtime despite working 50 to 60 hours per week.

State and federal law at the time of the violations mandated minimum wages of $4.65 for wait staff, $7.25 for bussing and kitchen staff and $10.875 per overtime hour worked. 

The investigation also revealed that Colony was paying the majority of its employees off the books, resulting in underpayments of its unemployment insurance obligations to New York State. 

A search warrant executed at the diner in November 2011 revealed falsified payroll and time records and a second set of books with the actual pay rate and hours worked by the diner’s employees. Records also indicated that the diner claimed on tax returns that only between 11 and 15 people worked at the diner, while they employed between 35 and 40 people in any given week.