Damages Awarded In ‘Slave Labor’ Scam

A judge has ordered a business coalition to pay damages for luring mostly homeless workers with promises of job training but paying them as little as $1 an hour for “slave labor.”

The workers performed clerical, administrative, maintenance, food service and outreach work from 1990 to 1995 for well below the minimum wage at the time - $4.25 an hour.

Many people were hired from a drop-in center for the homeless operated by the businesses “or just off the street,” said Mary Brosnahan of New York’s Coalition for the Homeless.

“These people were a pool of slave labor who performed real work, getting no training or oversight,” she said.

Brosnahan’s group and the Urban Justice Center won a lawsuit against the Grand Central Partnership, its affiliated social services group and the 34th Street Partnership.

U.S. District Judge Sonia Sotomayer on Wednesday ordered the consortium to pay back wages, overtime and lawyers’ fees to workers who took menial jobs in hopes of getting employment training. The case of each plaintiff is to be reviewed by the court to determine the damages owed.

The coalition said the workers learned basic job skills so they were not entitled to the minimum wage because they were trainees. The judge, ruling in the non-jury trial, said the workers were treated as employees, not trainees, and were hired to do work for which competing businesses pay higher wages.

In some cases, they were subcontracted to work in parks, help recycle waste at the World Trade Center and serve as guards for bank ATM machines, court papers say.

“They had homeless people pushing out homeless people from ATMs,” Brosnahan said. “If you’re going to make money off the backs of poor people and then offer them no training, that’s illegal.”