BabyVision Inc. a Poughkeepsie, N.Y.-based maker of baby apparel and accessories, must pay more than $121,000 to 49 workers for denying them overtime pay, trying to thwart federal investigators by hiding workers and threatening them if they spoke to U.S. Department of Labor Wage and Hour Division agents.
Following a one-year investigation by the Wage and Hour Division’s White Plains Area Office, it was determined that BabyVision Inc. and its owners Shreenivas Shah and Malti Shah paid employees, including ones who were not listed on the company’s payroll, straight time in cash and denied them the federally mandated overtime rate of one-and-a-half times their regular hourly wage, when their weekly work schedules exceeded 40 hours. The Shahs also inaccurately classified some employees as exempt from overtime, and failed to maintain proper payroll records.
Reached by phone Thursday, Malti Shah declined to comment. But her son Amit, the company’s vice president of business development, later said, “The Department of Labor Wage & Hour Division conducted an examination of BabyVision to verify its compliance with the Fair Labor Standards Act. BabyVision cooperated with the Department of Labor in the inquiry and has now fully resolved that matter. As the Consent Judgment makes clear, there was no finding of any intentional wrongdoing by BabyVision. Now that the Department of Labor matter has been concluded, BabyVision looks forward to refocusing on its business.”
BabyVision designs and distributes baby apparel and accessories under such labels as Luvable Friends, Hudson Baby, Yoga Sprout and Nurtria.
Found to be in violation of the Fair Labor Standards Act, the Shahs now must compensate the affected workers for $121,349 in overtime, back wages and liquidated damages.
The investigation also found that the Shahs had instructed employees to hide from investigators or provide false information. In addition, workers were told they would be terminated if they cooperated with investigators, according to a statement released by the U.S. Department of Labor Thursday. In response to that, the department issued a temporary restraining order to protect the workers and their rights, to ensure the probe into the company’s employment practices could continue.
In addition, the department issued a consent judgment to order the Shahs to pay the back wages and damages, to try 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.”
Jeffrey S. Rogoff, the department’s regional solicitor of labor in New York, said, “This case shows our commitment to take all necessary legal steps, including using restraining orders, to protect workers and their rights. 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.”
Going forward, the compliance plan requires that BabyVision use a time clock or another automated timekeeping device to record all workers’ hours. It also prohibits the company from having employees work off the clock and to accurately record employees’ work hours among other things.