Julie Su Acting United States Secretary of Labor | Official Website
Three Rhode Island nail salons in Cumberland, East Greenwich, and North Providence, along with their owner, have agreed to pay employees $753,500 in back wages and damages. This agreement resolves violations of the anti-retaliation provisions of the Fair Labor Standards Act (FLSA) and the Occupational Safety and Health Act (OSH Act), as well as FLSA’s overtime requirements.
The U.S. Department of Labor filed a lawsuit against New VIP Nail Spa Inc., VIP Neo Nails Inc., VIP Spa & Nails Inc., and owner Steven Xingri Cao in August 2022 following investigations by its Wage and Hour Division and Occupational Safety and Health Administration (OSHA). This case is notable for involving retaliation claims under both FLSA and OSH Act.
The lawsuit alleged that in July 2020, Cao fired an employee who was sickened by undiluted sanitizer after raising safety complaints with management and filing an OSHA complaint. Cao also threatened another employee close to the fired individual. Additionally, it was alleged that the salons failed to pay proper overtime compensation, did not maintain accurate work records, provided false information to investigators, and compelled employees to sign documents containing false employment information.
In February 2024, a consent judgment resolving the litigation was entered by the U.S. District Court for the District of Rhode Island. The judgment permanently forbids future violations of the OSH Act and FLSA by Cao and his businesses. It also mandates several corrective actions:
- Payment of $550,000 ($275,000 in back wages and $275,000 in liquidated damages) to 70 employees due to FLSA overtime violations.
- Payment of $168,000 in compensatory, punitive, and emotional distress damages to an employee fired for raising safety complaints.
- Payment of $23,500 in punitive damages to an employee who was threatened.
- Payment of $12,000 in punitive damages related to signing false employment documents.
- Provision of anti-retaliation training for supervisors.
- Posting notices explaining employees’ rights at each workplace.
- Hiring a payroll monitor for at least two years to ensure FLSA compliance.
- Engaging an independent safety consultant to audit safety hazards at the salons.
- Arranging a meeting between salon owners and representatives from OSHA and Wage and Hour Division for outreach purposes.
“Unfortunately, workers face several types of unlawful conduct by their employers," said Regional Solicitor Maia Fisher. "When workers’ rights are violated under multiple statutes, the U.S. Department of Labor will move decisively."
OSHA Regional Administrator Galen Blanton emphasized that discouraging or preventing worker participation in OSHA inspections can delay identification of hazards: “This employer’s egregious actions... place workers at potential risk.”
Wage and Hour Division Northeast Regional Administrator Mark H. Watson Jr. stated that this judgment sends a strong message about the costly consequences of failing to pay employees properly: “This consent judgment... sends a strong message.”
The investigations were conducted by Wage and Hour Division’s area office in Providence and OSHA’s Office of Whistleblower Protection Programs in Boston. The case was litigated by the department's regional Office of the Solicitor in Boston.
For more information about FLSA protections against retaliation or other laws enforced by Wage and Hour Division, contact their helpline at 866-4US-WAGE (487-9243). Information on whistleblower protections can be found on OSHA's Whistleblower Protection Programs webpage.
Civil Action No.: 1:22-cv-00311-WES-LDA
