Suher penalties could trigger wage bond

NORTHAMPTON — A provision of the city’s License Commission could add to the legal and financial tests Eric Suher-owned businesses are facing in Northampton after the state attorney general’s office announced last week that his companies failed to pay workers on time.

The Fair Wage Compliance Certificate requires employers seeking a new or renewed liquor license to certify that they comply with state wage and hour laws, a provision that the License Commission adopted in 2017. Failure by license seekers to certify that they are not subject to “federal or state criminal or civil judgment,” or “administrative citation” would require a wage bond, a type of insurance that would ensure employees get their due payments.

“It’s a protection for workers,” Mayor David Narkewicz said of wage bonds. “If someone who has a record of not fully funding wages, or withholding related to fully paying wages, this is basically having an insurance … that shows you will cover wages in the event you cannot cover them.”

In 2017, the City Council and Narkewicz implemented a series of orders and resolutions related to fair wages and wage theft. The compliance certificates of the License Commission were incorporated as part of those efforts, according to Narkewicz.

“It allows the city, in all areas that we have authority, to exert support for wage laws and make sure people are complying,” Narkewicz said. “In this particular case, I commend the attorney general, who has actively investigated and pursued this.”

The attorney general’s office has ordered Suher to pay more than $100,000 in restitution and penalties following an investigation that found his companies had violated the rights of approximately 30 workers, according to a statement by the AG’s office last week. The $100,000 in penalties covers four separate citations, each with its own amount.

Suher was required to pay $1,991 to cover the wages he had failed to pay on time.

Numerous employees of Iron Horse Ventures had filed complaints in 2019 about not being paid with the Pioneer Valley Workers Center, which referred the matter to the attorney general’s office.

In a statement to the Gazette, Suher said he would appeal the citations handed down by Attorney General Maura Healey to Iron Horse Ventures and him as owner. Suher could not be reached for further comment Wednesday.

Massachusetts law does not define “wage theft,” and the City Council passed a resolution in May urging state lawmakers to codify a definition by passing An Act to Prevent Wage Theft (S.1179), a bill currently under consideration of the state Legislature’s Joint Committee on Labor and Workforce Development.

The council resolution reads “for the protection of workers in Massachusetts, the law must define wage theft and must provide rights and remedies for workers who have been victims of wage theft by employers.”

The resolution gives several descriptions of wage theft, including the failure to pay a required minimum wage; failure to pay overtime as required; failure to pay wages timely or in full; failure of the employer to provide sick time at a minimum of one hour of earned sick time for every thirty hours worked by an employee.

If the AG’s citations are upheld, the annual renewal of Suher’s liquor licenses, due Jan. 1, would come on the condition of wage bonds over three years — a costly penalty based on the history of wages previously withheld.

According to the attorney general’s website, when a citation is issued, the employer has 21 days to pay restitution and penalties ordered by the citation, and to stop violating the wage and hour laws. An employer may also appeal a civil citation within 10 days of receipt of the citation by sending notice to both the Division of Administrative Law Appeals (DALA) and the Attorney General’s Office.

The wage bonds would amount to three times the amount of the wage law violation, according to the rules and regulations of the Northampton License Commission. In the second year, the wage bond would be twice the amount imposed for the wage law violation, and for the third year, the bond would be equal to the wage law violation.

“No bond shall be required after the third year provided that the licensee is not subject to further judgment for wage law violation,” the city’s fair wage provision reads. “Any new violation shall cause the three-year clock to rest.”

The AG’s office determined that at least $1,991 is owed in restitution to 18 workers of Suher-owner companies.

“The companies’ failure to produce records has made it difficult to determine the full amount potentially owed to workers,” according to a statement by the AG’s office.

Other establishments that had to post wage bonds under the fair wage provision in Northampton include Oriental Taste on Main Street and Osaka on Old South Street. A third, now-defunct business Sakura Buffet, formerly of King Street, also posted the wage bond under the rule.

Luis Fieldman can be reached at lfieldman@gazettenet.com