05-21-2020
Creative Hairdressers Inc. operates 750 unisex hair salons in 15 states and the District of Columbia. On March 21, 2020, it closed all 750 salons due to the COVID-19 crisis, and the company subsequently declared bankruptcy. After an investigation by the Labor Department’s Wage and Hour Division, it was determined that the company failed to pay employees their final paychecks, which violates the minimum wage and overtime provisions of the FLSA and affected more than 7,500 employees. The U.S. Bankruptcy Court for the District of Maryland has ordered Creative Hairdressers Inc. to pay over 1.1 million in back wages to the employees. In addition to the back wages, the court ordered the company to pay an approximate total of $3,100,000 to satisfy state minimum wages, 401(k) contributions, bonus program payments, and applicable employment-related taxes.
According to a Wage and Hour Division representative, “While the employer’s violations were not found to be willful, its employees are among the thousands of personal service workers in America whose livelihoods have been dramatically affected by the coronavirus pandemic. Like many workers, these employees depend on their paychecks to meet their basic living expenses. Even in these unprecedented times, the U.S. Department of Labor’s Wage and Hour Division is committed to ensuring that workers receive their hard-earned wages.”