First Realty Management Co. and seven Legacy Senior Living communities it operates in the Rochester, NY, area will pay $328,000 to settle claims that several employees were underpaid between 2010 and 2014, New York Attorney General Eric Schneiderman announced Thursday.
Compensation for 15 live-in safety coordinators sometimes worked out to less than $2 an hour at a time when the minimum wage was between $8 and $9 per hour, according to the attorney general.
The company will pay approximately $239,000 in back wages to the affected employees and about $89,000 in damages, interest and penalties. Legacy also agreed to improve its recordkeeping practices, clearly inform workers of their rights and submit to monitoring for two years.
Chris DiMarzo, COO of Legacy Senior Living, said in a statement to McKnight’s Senior Living that the company disagreed with the attorney general’s findings but “worked with them to bring the issue to a resolution.”
The safety coordinators answered emergency calls from residents on an on-call basis from 8 p.m. to 8 a.m. and performed housekeeping and light maintenance for 10 hours a week. Legacy did not pay cash wages to the people in those positions; instead, the company provided an apartment and furnished utilities at no cost to them or at a reduced rate for as long as they were employed.
State law allowed Legacy to count the accommodations as part of employees’ compensation but capped the value that the company could credit toward wages. Based on the number of hours the coordinators worked, Schneiderman said, Legacy was required to pay cash wages in addition to providing the non-cash compensation, to bring the employees’ hourly pay up to the required minimum wage.
Legacy also allegedly did not keep records of the actual hours worked on-call by the live-in safety coordinators during the time period at issue, nor did it provide employees with the required notice that their wages included an allowance for the use of an apartment, according to the attorney general.
“When the AG’s office first inquired months ago about the live-in working and compensation arrangement with several employees, we cooperated immediately and worked with the AG’s office to put a fair settlement together,” DiMarzo said. “We also immediately put internal controls in place to make certain that we were complying fully with the state labor laws.”
Schneiderman said that a former coordinator informed him of Legacy’s employment practices after the company filed a lawsuit to obtain $2,000 for one month’s back rent for an apartment in which the worker continued to live for 30 days after terminating employment. The former staff member reportedly did not have enough funds to put down a security deposit for another apartment so sought assistance from the attorney general.
Legacy employs “hundreds of skilled and dedicated employees in our Legacy communities,” DiMarzo said, “but this issue only affected several employees.”