BabyVision Inc. willfully violates federal wage and hour law, obstructs investigators and threatens employees

NEW YORK — A Poughkeepsie-based maker and distributor of baby apparel and accessories denied 49 workers overtime pay and then attempted to thwart federal investigators by hiding workers and threatening them if they spoke to U.S. Department of Labor Wage and Hour Division agents.

A yearlong federal probe found that BabyVision Inc. and the company's owners, Shreenivas Shah and Malti Shah, paid employees — including some not on the company payroll — straight time in cash and denied them the required overtime rate of one and one-half times their regular hourly wage when they worked more than 40 hours in a workweek. The owners also improperly classified some employees as exempt from overtime. Additionally, the Shahs failed to maintain proper payroll records.

The Shah's actions violated the federal Fair Labor Standards Act. As a result, the agency determined that the workers are due $121,349 in overtime back wages and liquidated damages.

Early in the investigation, the Shahs told employees they were to hide from investigators or provide false information. Workers were threatened with termination if they cooperated with investigators. The department responded by obtaining a temporary restraining order to protect the workers and their rights, allowing the review of the company's employment practices to continue.

A consent judgment was also secured by the department that ordered the Shahs to pay the back wages and damages, take extensive corrective action to prevent future violations and pay $13,744.50 in civil money penalties, given the willful nature of their violations.

"Deliberately denying employees their earned income is illegal, and it makes it harder for workers to care for themselves and their families," said Sonia C. Rybak, the Wage and Hour Division's assistant district director in the White Plains Area Office. "We will use every enforcement tool at our disposal to ensure a fair and level playing field for employers and fair pay for employee work."

"This case shows our commitment to take all necessary legal steps, including using restraining orders, to protect workers and their rights," said Jeffrey S. Rogoff, the department's regional solicitor of labor in New York. "The judgment here does more than secure back wages. It commits BabyVision and the Shahs to a comprehensive compliance plan that includes corrective action and worker education to keep these violations from happening again."

The compliance plan requires the defendants to use a time clock or another automated timekeeping device to record all hours worked by their employees accurately; prohibits employees from working off-the-clock; record employees' work hours and break time correctly; prominently post an employees' rights notice and poster in Spanish and English; and provide all current workers and new hires with a copy of the consent judgment in Spanish and English.

BabyVision designs and distributes baby apparel and accessories to retail stores and on the Internet under brands such as Luvable Friends, Hudson Baby, Yoga Sprout and Nurtria. It operates a warehouse and offices at 30 Firemens Way in Poughkeepsie. The underpaid employees prepared customer orders, loaded and stocked items in the warehouse and maintained the company's website.

The Wage and Hour Division's White Plains Area Office conducted the investigation, while the case was litigated by attorneys Elena Goldstein and David Jaklevic of the department's Regional Office of the Solicitor in New York City.

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates of pay, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers are required to maintain accurate time and payroll records.

For more information about the FLSA and other federal wage laws, call the Wage and Hour Division's toll-free helpline at 866-4US-WAGE (487-9243) or its White Plains Area Office at 914-682-6348. Information also is available at http://www.dol.gov/whd/.

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Perez v. BabyVision Inc., Shreenivas Shah and Malti Shah

Civil Action Number: 14-cv-7821 (KMK)