Bronx, Brooklyn beauty supply stores ordered to pay $218K to 16 workers illegally denied overtime pay

NEW YORK – For more than a dozen sales clerks, cashiers, stock clerks and security guards at three beauty supply stores in the Bronx and Brooklyn, the hours were long but too often, their pay came up short.

Now, as a result of a U.S. Department of Labor Wage and Hour Division investigation and the department’s litigation, their employers must pay the 16 workers a total of $218,000 in back wages and liquidated damages.

The 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.

“These violations denied the employees the full wages to which they were legally entitled for their long hours of work, week in and week out,” said Sonia Chasin Rybak, the Wage and Hour Division’s acting district director in New York City. “Unscrupulous employers often try to intimidate and exploit vulnerable, immigrant, non-English-speaking workers. The defendants’ unacceptable short-changing of these employees also economically undercuts those retailers that pay their workers correctly.”

“The U.S. Labor Department rigorously pursues appropriate and effective legal measures to compensate vulnerable workers such as these, challenge and change the behavior of non-compliant employers and level the playing field for employers who play by the rules,” said Jeffrey S. Rogoff, the department’s regional solicitor in New York.

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 division’s New York City District Office investigated the case. Attorneys Orly Shoham, Patrick Dalin and Daniel Hennefeld from the department’s New York solicitor’s office litigated the case for the division.

The stores and their locations:

• Exclusive Beauty Supply Inc., 714 Broadway, Brooklyn.
• Virgin Beauty Supply, 2042 Jerome Ave. Bronx.
• Exquisite Health & Beauty Supplies Inc., 737 East Tremont Ave., Bronx.

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.

For more information about federal wage laws administered by the Wage and Hour Division, call the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd/.

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Perez v. Exclusive Beauty Supply Inc.; Exclusive Beauty Supply 2 Inc. d.b.a. Virgin Beauty Supply; Exquisite Health & Beauty Supplies Inc.; Hassan M. Esskander; and Mahdhar Esskander, Individually.

Civil Action Number:  1:15-cv-07712-RJS

Read this news brief in Spanish.