State investigating claims of ‘Falls wage theft

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The Moe’s and A&W owned by Muhammad Shoaib on Rainbow Boulevard. Photos by J. Dale Shoemaker.

The New York State Department of Labor is investigating claims that a Niagara Falls fast food restaurateur failed to pay overtime and withheld tips from employees.

Two former employees of Muhammad Shoaib’s fast food restaurants have filed a complaints with the labor department and one has since been contacted by an investigator. Other former employees said they are in the process of filing complaints of their own. In a statement, a labor department spokesperson confirmed that it was in receipt of complaints but declined to comment.

“Regarding the complaints on file, we cannot comment on ongoing investigations,” the spokesperson said.

The investigation comes as several employees of Shoaib’s restaurants claim they lost their jobs over the past week, either for raising concerns about pay internally or for speaking to Investigative Post. In a story published last week, Investigative Post reported that nine current or former employees of Shoaib’s alleged they were not properly paid for the hours they worked or did not receive the tips customers left via credit card. 

Both a general manager overseeing some of Shoaib’s restaurants as well as an attorney representing Shoaib and his wife denied that the employees were retaliated against. 

“They have not and do not retaliate against anyone for anything,” said attorney Matthew Miller, of the firm Rupp Pfalzgraf. “They are dedicated to their employees and the community.”

Miller declined to comment on the specific allegations made by Shoaib’s employees.

“I can’t comment nor can the businesses on any specific personnel matters,” he said. “What I will say is that Mr. Shoaib and his wife and all of their businesses are outstanding individual and corporate citizens and comply with all state and federal laws.”

Shoaib himself did not return a phone call or text message seeking comment for this story.

Sean McIver, who was fired last week, said he felt Shoaib retaliated against him for raising issues about employee pay.

“He retaliated on everybody,” McIver said. “They walked me out with the police. That was embarrassing. That’s like an insult to me.”

In his complaint to the labor department, McIver alleged he was wrongfully terminated and had pay withheld. He said he often worked 80-hour weeks and was paid less than the state minimum of $1,161 for such work. He wrote that he was fired because he was “pointing out all of the wrongdoing and the owner did not like that.”

Lisa Moore, a general manager of several of Shoaib’s restaurants, said McIver was fired for a different reason.

Another employee, who was quoted in our story last week, was subsequently fired. The reason is unclear.

Shoaib owns 20 fast food restaurants in Niagara Falls and southern Ontario, including the recently opened A&W and Moe’s Southwest Grill on Rainbow Boulevard. 

He is currently seeking $247,000 in property, sales and mortgage tax breaks from the Niagara County Industrial Development Agency to convert another Rainbow Boulevard building into a food court. Presently a haunted house, Shoaib plans to open a Cinnabon, a Subway, a Mediterranean restaurant and other businesses in the building. 

Shoaib previously received $172,000 in tax breaks and a $262,000 grant from the IDA to open the Moe’s and the A&W.

At that time, local lawmakers from Buffalo and Rochester criticized the IDA for granting Shoaib the funds. In response to Investigative Post’s reporting last week, one of those lawmakers, Assemblyman Jonathan Rivera of Buffalo, again criticized Shoaib.

“The gravy train has to stop,” Rivera said in a statement. “Our communities, our workers, and our family-owned small businesses deserve better.”

At a public hearing Wednesday to discuss his latest application for tax breaks, two Niagara Falls residents spoke against granting Shoaib further subsidies. 

“He’s screwing people already, what’s he need more businesses for? To screw more people? That ain’t right,” one of the men, David Giffin, told Investigative Post after the hearing. Griffin said his grandson was recently hired to work at one of Shoaib’s restaurants.

One resident, retired police officer Thomas Volk, said he attended the hearing on behalf of Shoaib and said the IDA should grant him the tax breaks.

“I’m not familiar with his business practices, I’m just familiar with the fact the man is interested in investing in Niagara Falls and building up businesses,” Volk said. “I think his heart is in the right place and I think that it would be wise to help him open businesses.”

Andrea Klyczek, executive director of the IDA, declined to speak to Investigative Post on Wednesday about Shoaib’s application for subsidies or the allegations against him. 

In the meantime, other former employees of Shoaib’s continue to allege he has withheld pay.

Leyla Ayala-Colon said she worked at the Crumbl Cookies owned by Shoaib from January through August last year and was never paid overtime when she worked more than 40 hours in a week.

Ayala-Colon further said she never received the tips customers left via credit card.

The Labor Department has said employers are required to pay overtime to hourly employees and tips paid with cash or credit cards. 

“I was told that they don’t do time and a half,” she said. “I asked multiple times about the card tips and it was always a, ‘I will get back to you.’”

“They treated us, I’m sorry to say, like crap.”

J. Dale Shoemaker