Wage and Hour Division (WHD)
U.S. Department of Labor
SEATTLE -- Redmond Herbal Spas LLC, doing business as Asian Miracle Massage, and Mei Zheng, also known as Margaret Sutton, individually and as owner of three area spas, were ordered by a federal judge to pay 23 massage therapists $67,768 in back wages and an equal amount in liquidated damages to total $135,536. The order follows an investigation by the U.S. Department of Labor’s Wage and Hour Division. Investigators found Redmond Herbal Spas misclassified employees, who worked as massage therapists, as independent contractors. It typically paid them on a commission-only basis, resulting in violations of the minimum wage and overtime provisions of the Fair Labor Standards Act.
“Employees worked long hours and did not receive the legally required minimum wage and overtime. These employees were unlawfully treated as independent contractors and denied basic employment rights. Misclassifying employees as independent contractors hurts employees and their families and gives an unfair competitive advantage to violators,” said Donna Hart, director of the Wage and Hour Division’s Seattle District Office.
In an order entered in the U.S. District Court in Seattle, Judge Thomas Zilly required the defendants to install time clocks at each location, retain a third-party payroll vendor, supply a copy of the payroll to the Wage and Hour Division on a quarterly basis and distribute a notice of the employee’s rights under the FLSA. The employees worked at a spa in Redmond under the name of Redmond Herbal Spa, as well as at locations in Northgate Mall in Seattle and Everett Mall in Everett, which offers massage services under the name of Asian Miracle Massage. The Redmond and Everett locations have closed. In accordance with a memorandum of understanding between the state of Washington and the department, the case was referred to state agencies for further action.
The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular hourly rates for hours worked beyond 40 per week. Additionally, the law requires employers to maintain accurate time and payroll records, and prohibits retaliation against employees who exercise their rights under the law. The FLSA provides that employers who violate the law are, as a general rule, liable to employees for their back wages and an equal amount in liquidated damages. Liquidated damages are paid directly to the affected employees. The misclassification of employees as independent contractors presents a serious problem for affected employees, employers and the economy. Misclassified employees are often denied access to critical benefits and protections, such as family and medical leave, overtime, minimum wage and unemployment insurance, to which they are entitled.
The order requesting summary judgment granted by the court was filed by the Regional Solicitor’s Office in Seattle. For more information about the FLSA, call the division’s Seattle District Office at 206-398-8039 or its toll-free helpline at 866-4US-WAGE (487-9243). Information is also available at http://www.dol.gov/whd.
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