$218,000 in Back Wages and Liquidated Damages for Violations of Overtime, Minimum Wage and Recordkeeping Requirements FLSA

 
Friday, September 2, 2016
 

The Department of Labor's Wage and Hour Division found Exclusive Beauty Supply Inc.; Exclusive Beauty Supply 2 Inc., which does business as Virgin Beauty Supply; Exquisite Health & Beauty Supplies Inc., owner Hassan M. Esskander and his son Mahdhar Esskander willfully violated the overtime, minimum wage and recordkeeping requirements of the Fair Labor Standards Act.

Investigators determined the stores’ employees worked between 50 and 68 hours per week typically and were paid only straight time when they worked more than 40 hours per week. The businesses did not always record daily stop or start times and total daily hours worked by each employee.  The companies’ timesheets and payroll records did not match and the employer recorded employees’ hourly wage rates incorrectly to conceal the violations. In addition, the agency found the companies did not pay two employees the federal minimum wage.

The department obtained a consent judgment in the U.S. District Court for the Southern District of New York that orders the defendants to:

  • Pay 16 employees $218,000 – $109,000 in back wages and an equal amount in liquidated damages.
  • Comply with the FLSA’s overtime, minimum wage and recordkeeping requirements.
  • Amend their pay practices to include a time clock or other automated timekeeping system; pay each employee based on the hours they actually worked; provide each employee with a printed statement of their work hours and the opportunity to correct the statement if necessary,
  • Retain a third-party examiner knowledgeable about the FLSA to perform quarterly compliance audits, prepare written compliance status reports and submit them to the Wage and Hour Division upon request.
  • Refrain from requiring the employees to return or ‘kick back’ the wages and damages to the defendants.
  • Refrain from retaliating against employees or telling them to not cooperate with Labor Department investigations.
  • Provide employees with information, publications and a notice of their FLSA rights in English and Spanish.

If the defendants fail to pay the back wages and liquidated damages, the court is authorized to appoint a receiver to carry out the terms of the consent judgment at the defendants’ expense. A lien on residential property owned by defendant Hassan M. Esskander will serve as security for the payment of the back wages and liquidated damages.

The consent judgment resulted from a settlement agreement reached by the parties after three days of bench trial proceedings before District Judge Richard J. Sullivan, during which the department presented testimony from nine current and former employees of the defendants. At the start of the fourth day of trial, before the defendants themselves were to take the witness stand, the defendants agreed to pay the full amount of back wages and liquidated damages that the department had computed and demanded for the trial.

The FLSA requires that covered, nonexempt workers be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus one and one-half times their regular wages for hours worked beyond 40 per week. Employers also must maintain accurate time and payroll records.

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