Nail salon owner must pay $750,000 to workers
PROVIDENCE – The owner of a popular nail salon chain in Rhode Island has been ordered to pay current and former workers $753,500 in back wages and damages for a persistent pattern of “callous indifference” to federal fair labor and work-place safety laws.
Steven Xingri Cao reached a consent judgment Feb. 22 with the U.S. Department of Labor to settle fair wage violations and claims that he retaliated against employees who exercised their rights under the Occupational Safety and Health Act.
Cao is the owner of New VIP Nail Spa, Inc., doing business as VIP Nails & Spa, at 545 Main St., East Greenwich; VIP Neo Nails, Inc., operating as VIP Nails & Spa at 1401 Douglas Ave., North Providence; and VIP Emerald Nails, Inc. doing business at VIP Nails & Spa at 2 Mendon Road, Cumberland.
Cao did not return a phone call placed Thursday to the North Providence salon, though the woman who answered said she would pass the message along. Cao controlled and operated the salons with his wife, Laura Huazi Li, according to court records.
Here’s the terms of the judgment
The total damages of $753,500 amounts to $191,500 in compensatory damages for emotional distress and punitive damages under OSHA laws.
Another $562,000 would be to pay back wages, as well as liquidated and punitive damages under the Fair Labor Standards Act.
Wingting Wong, the nail technician who filed an OSHA complaint in 2020 about chemicals being used at the Cumberland shop and was fired the next day, was awarded $168,000 of the sum for unlawful retaliation by the owner.
Her friend, Meixue Lin, who began working at the salon in 2019, three years after Wong, received $23,500 in punitive damages.
Cao was ordered to pay $520,000 of the judgment within 14 days of its Feb. 22 approval by U.S. District Court Judge William E. Smith.
Wong said in an email this week that Cao missed the 14-day deadline, but that a Department of Labor lawyer told her Wednesday that the checks had been sent, though no payment has been confirmed. Altogether, there are about 70 current and former employees that are due back wages and damages, she said.
Cao was required to put 1605 Douglas Ave, Unit1, North Providence, on the market to help pay the rest. The property is listed on Zillow for $250,000.
What else is in the order?
Cao and his staff are barred from firing, threatening to fire or further disciplining or harassing any employee engaged in protected activity under federal fair labor and OSHA laws, according to the order.
In addition, the court ordered him not to report or threaten to report employees, former employees or family member to law enforcement or immigration officials in response to them exercising their legal labor rights.
He and his staff are prohibited, too, from using immigration status, citizenship or work authorization against workers.
He cannot interfere with workers’ ability to seek employment elsewhere in retaliation for them exercising their rights.
He was ordered not to discriminate against or discourage any worker from engaging in fair labor activities.
He must pay overtime hours, keep accurate financial records and hire a financial monitor and health
and safety auditor.
The complaint that spurred the consent order
According to the Department of Labor’s 2023 complaint, the Cumberland salon’s manager, Zhongwan Jin, began to use a chemical disinfectant spray to sanitize areas without properly diluting it, leading to nose and throat reactions in several employees.
Wong, who has asthma, sought medical treatment as a result and warned Cao that she would file an OSHA complaint about the hazardous conditions.
Cao reportedly characterized Wong’s communications about pursuing her legal rights as threats and blackmail.
OSHA asked Cao to investigate the alleged conditions immediately and make necessary changes. Cao was directed to post a copy of OSHA’s letter describing the alleged hazards in a conspicuous location at the salon.
Cao told the agency that the disinfectant had been changed and that he had developed a written safety protocol for the use of chemicals.
Labor officials then launched a wage and hour investigation to determine if Cao was complying with fair labor laws.
According to the complaint, Cao instructed employees to sign documents detailing false information about the tips they received, their employment history and hours worked. The workers told investigators that they believed they would be fired otherwise.
The agency determined that Cao failed to pay overtime to about 70 employees, instead paying them $5 for additional hours worked, according to the labor complaint. Some were also paid less than minimum wage. The agency found that Cao and the salons failed to keep accurate records and paid some employees cash without keeping a record.