Hey Compliance Warriors and Bosses!
Three Rhode Island nail salons located in Cumberland, East Greenwich, and North Providence, along with their owner Steven Xingri Cao, have agreed to pay $753,500 in back wages and damages to their employees. This agreement follows investigations by the U.S. Department of Labor’s Wage and Hour Division and Occupational Safety and Health Administration (OSHA), which revealed multiple violations of worker protection laws.
The investigations began after the Department of Labor received complaints about working conditions and retaliation against employees. These cases are significant as they represent one of the few joint actions filed by the U.S. Department of Labor addressing retaliation claims under both the Fair Labor Standards Act (FLSA) and the Occupational Safety and Health Act (OSH Act).
In July 2020, an employee at one of the salons was fired and threatened after raising safety concerns about undiluted sanitizer and filing an OSHA complaint. Another employee who was close to the fired worker was also threatened. Additionally, the salons were found to be in violation of overtime payment laws, failed to keep accurate work records, provided false information to investigators, and forced employees to sign documents with false employment details.
In February 2024, a consent judgment was obtained and entered by the U.S. District Court for the District of Rhode Island. This judgment includes several mandates to ensure compliance with labor laws:
- Compensation: The businesses must pay 70 employees a total of $550,000, which includes $275,000 in back wages and $275,000 in liquidated damages due to FLSA overtime violations.
- Damages for Retaliation: They must pay $168,000 in OSHA damages to the employee who was fired for raising safety concerns, $23,500 in punitive damages to the employee who was threatened, and $12,000 in FLSA punitive damages to those forced to sign false documents.
- Training and Notices: They are required to provide anti-retaliation training to supervisors and post notices in English, Spanish, and Korean at each workplace outlining employee rights.
- Monitoring and Audits: The judgment mandates the hiring of a payroll monitor for at least two years to ensure FLSA compliance and an independent safety consultant to audit the salons for any health hazards.
- Industry Outreach: The nail salon owners must arrange a meeting with OSHA and the Wage and Hour Division to promote labor law compliance among industry employers.
“Unfortunately, workers often face multiple forms of unlawful conduct, including unfair wages, unsafe conditions, and retaliation. The U.S. Department of Labor is committed to protecting workers’ rights comprehensively,” said Regional Solicitor of Labor Maia Fisher in Boston.
“This employer’s actions in firing and threatening workers for raising health concerns and filing complaints with OSHA are unacceptable and against the law,” stated OSHA Regional Administrator Galen Blanton. “Such behavior can hide or delay the correction of workplace hazards.”
“This consent judgment, which includes $562,000 in FLSA back wages and damages, sends a strong message to employers about the severe consequences of failing to pay employees properly and retaliating against those who assert their rights,” added Wage and Hour Division Northeast Regional Administrator Mark H. Watson Jr.
This blog post highlights the importance of fair treatment and protection of workers’ rights, reinforcing the commitment of the U.S. Department of Labor to uphold labor laws and ensure safe and equitable working conditions.
