Two UES Eateries Hit With Wage Theft Suits

UPPER EAST SIDE, NY — Two popular Upper East Side restaurants are being sued for wage theft by former employees, according to Federal court documents.

The two spots — acclaimed South African wine bar Kaia and the kosher diner Effy’s — stand accused of not paying overtime wages to workers as required by law, according to the suit.

Attorney Louis Pechman, an active pursuer of wage theft claims whose firm filed the two suits, said wage theft is a common problem in New York City restaurants.

“Restaurants in New York are notorious for wage theft violations," Pechman told Patch in a statement. "The Upper East Side is no exception."

Neither restaurant replied to Patch's requests for comments.

While the lawsuit does not specify an exact amount in damages, similar cases of Pechman's have ended with settlements in the tens or hundreds of thousands.

As examples, Heidelberg Restaurant recently settled with the firm for $170,000, Sables settled a suit in 2020 for $85,000 and Serendipity 3 settled for nearly $1 million.

Both suits accuse Effy’s and Kaia of stiffing employees on overtime pay, which is required for nearly all workers in New York, except for certain salaried employees according to waiterpay.com.

A former worker at Kaia, the critically acclaimed wine bar on Third Avenue and East 91st Street, contend waiters and bartenders were paid solely in tips and denied minimum and overtime wages, court records show. The suit was filed as a collective action with at least 15 other former employees who could join the suit.

The former worker represented by Pechman said he was paid just $100 a day as dishwasher and without base pay as a waiter and bartender. (The tipped minimum wage is $10 per hour in New York City, according to the Labor department.)

This isn’t Kaia’s first run-in with wage theft accusations. In 2019, the restaurant was forced to pay over $22,000 to an employee for unpaid wages in a state case, court records show.

Kaia told the New Yorker in 2021 that they have provided New York City with more than $7 million of South African wine.

At Effy's — which has two Upper East Side locations on 89th and 100th streets — two workers claim the owner practiced strange pay practices, alternating between checks and cash and providing inaccurate wage statements, according to the suit.

One worker, employed by Effy’s for more than four years, worked 55 hours a week but only received a pay between $17 and $20 an hour, in violation of city rules that dictate overtime payments increase to time and a half.

The second employee worked 65 hours a week but never received overtime, according to the suit, which notes Effy’s makes more than $500,000 in annual sales.

Pechman, an active pursuer of wage theft claims who maintains a website to help educate both employees and employers about restaurant worker rights rights, said these suits are often very technical.

“Wage theft lawsuits are all about the math," Pechman said. "For the employer who violates the labor laws, there is no place to hide.”

In 2009, Pechman won a $3 million settlement in a 200-person class action suit against the famed Sparks Steakhouse for skimming worker’s tips. Since then, his firm has sued over 200 restaurants, recovering over $25 million in back wages according to their website.

“We have seen wage payment issues in fine dining establishments, fast casual restaurants and bodegas,” Pechman said. “Wage theft issues cut through every borough, every cuisine, and every type of job in restaurants, including servers, cooks, and delivery workers.”