Wage and Hour Division (WHD)

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NEW YORK -- A chain of New York City spas and nail salons under common ownership have agreed to pay more than $222,000 in minimum wage and overtime back wages and interest to 152 employees to settle a lawsuit filed by the U.S. Department of Labor alleging violations of the federal Fair Labor Standards Act (FLSA).

Named in the department’s lawsuit, filed in the U.S. District Court for the Southern District of New York, were: Spring Street Spa Belles Inc. (202 Spring St.), 7th Avenue Spa Belles Inc. (200 W. 15th St.), Spa Belles Inc. (326 Bleecker St.), Second Avenue Bloomie Nails Inc. (120 2nd Avenue), Seventh Avenue Bloomie Nails Inc. (170 W. 23rd St.), Yaerim Nail Corp. (132 7th Avenue), and Hong Chul Yi, individually and as owner of the companies.

According to Philip Jacobson, district director for the department’s Wage and Hour Division in New York City, an investigation found that some employees at each location were not being paid the proper federal minimum wage and that others were not properly compensated for all the hours over 40 they worked in typical work weeks. The investigation also found that the employers were not maintaining proper records of employees’ hours of work and rates of pay.

“In fact, we found that all the employees at these locations were being paid a flat day rate no matter how many hours they worked,” said Jacobson. “This court action should signal all employers in New York City that the Labor Department is very serious about enforcing the FLSA and ensuring that employees are always properly paid for all of the hours they work, especially when it comes to workers employed in low-wage industries.”

The FLSA requires that covered employees be paid at least the applicable minimum wage and one and one-half times their regular rate of pay for hours worked over 40 per week. The law also requires employers to maintain accurate records of employees’ wages, hours, and other conditions of employment.

A consent judgment, approved by the court, prohibits the defendants from future violations of the minimum wage, overtime and recordkeeping provisions of the FLSA. The July 26 court order signed by U.S. District Judge Richard M. Berman also prohibits the defendants from taking retaliatory action against any employees who exercise their rights under the law and orders them to pay a total of $222,036 in back wages and interest in 48 installments. The back wage payments cover the period between September 2003 and September 2005.

According to the judgment, the court will appoint a receiver to collect the back wages in the event the defendants fail to make any of the payments. The receiver would have the power to seize and liquidate any of the defendants’ assets in order to satisfy the back wage payment order. Finally, the defendants are ordered to advise their employees of their rights under the FLSA, the terms of the judgment, and their rights to engage in protected activities under the FLSA without fear of retaliation. Official posters must also be posted where all employees may view them. The defendants agreed to the entry of the consent judgment without admitting or denying any violations of the FLSA.

The department’s Wage and Hour Division New York district office investigated this case, and the lawsuit was filed by the department’s Regional Solicitor’s Office in New York City. For more information about the requirements of the FLSA, call the Department of Labor’s toll-free help line at 1 (866) 4US-WAGE (487-9243). Information is also available on the Internet at www.wagehour.dol.gov.

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