Tuesday, October 3, 2017

The 22nd nominee for the “worst employer of 2017” is … the wage absconder

Suppose you decide you are not going to pay your employees minimum wage and overtime required by the Fair Labor Standards Act. And let’s further say that the department of labor investigates your wage and hour practices and fines you to the tune of $1.95 million for the unpaid wages.

Do you—
  1. Figure out how to pay the fine?
  2. File bankruptcy and wrap yourself in its protections in an attempt to save as much of your assets as possible?
  3. Transfer assets to family members to create an appearance of insolvency and inability to pay the fine?

If you chose option number 3, you might be the worst employer of 2017.

In January 2010, the New York State Department of Labor began an investigation into Ji Sung Yoo and the restaurants’ unpaid minimum wages, overtime and tips, according to court filings. During the course of the probe in 2010 and 2011, he transferred interests in three pieces of real property to his wife, Sandra, and their two adult children, Samuel and Carolyn, court filings say. The properties were a Fifth Avenue condominium in Manhattan, a home in Little Neck, Queens, and a commercial property in Sheepshead Bay, Brooklyn, with a total appraised value of $3.15 million. 
In February 2011, the DOL assessed a penalty for unpaid back wages against Ji Sun Yoo and the restaurants for a total of $1.18 million, according to Judge Sweet. Two months later, because the restaurants failed to pay the DOL penalty within 10 days, the DOL assessed an additional civil penalty, raising the total to $1.95 million, the judge said.

The judge added:
None of the conveyance papers for the properties indicate that any consideration was paid to J. Yoo for the transfers. Evidence regarding [his wife] S. Yoo’s knowledge of the financial situation of the restaurants and the impact of the DOL investigation on the Yoos’ property raises questions about the Yoos’ good faith in the conveyances.

The case is Kim v. Yoo (S.D.N.Y. 9/29/17) [pdf], and merits consideration as the worst employer of 2017.