US hairdressing chain Creative Hairdressers has been ordered to pay $1,149,965 (£940,930) in back wages to over 7,500 employees to resolve violations of the minimum wage and over time provisions under the US Fair Labor Standards Act (FLSA).
After an investigation by the US Department of Labour’s Wage and Hour Division (WHD), the organisation was found to have closed all of its 750 salons on 21 March 2020 due to the Covid-19 (Coronavirus) pandemic, without paying employees’ final pay cheques.
Following this closure, Creative Hairdressers filed Chapter 11 bankruptcy and was purchased by another business.
The court ordered the organisation to pay $3,100,000 (£2,536,497) to satisfy state minimum wages, 401,000 contributions, bonus programme payments and applicable employment-related taxes.
WHD secured back wages for employees in 15 states of America where the organisation had salons including Connecticut, Florida, New Jersey and Pennsylvania.
Cheryl Stanton, wage and hour division administrator at WHD, said: “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.”
“These employees depend on their pay to meet their basic living expenses. Even in these unprecedented times, the US Department of Labor’s Wage and Hour Division is committed to ensuring that staff receive their hard-earned wages.”
Creative Hairdressers was unavailable to comment at the time of publication.