Hair Cuttery Owner Must Pay $1.1M in Pre-Virus-Closure Wages

A hair salon corporation that abruptly closed 750 locations during the pandemic, without cutting workers their final paychecks, must pay more than $1.1 million to thousands of employees under a court order, the Labor Department said.

The U.S. Bankruptcy Court for the District of Maryland ordered the payments following a DOL investigation.

The case comes as federal wage enforcers also respond to a growing number of complaints from workers of being stiffed on paychecks despite logging regular hours during the coronavirus pandemic.

Creative Hairdressers Inc., which operates as Hair Cuttery, BUBBLES Salon, Salon Cielo, and Salon Plaza, shuttered all locations March 21 and filed for Chapter 11 bankruptcy.

The DOL’s Wage and Hour Division intervened in the bankruptcy case, conducting an investigation that uncovered violations of federal minimum wage and overtime laws. The division said it secured back wages for some 7,500 workers in 15 states plus Washington, D.C.

The hair salon company also is on the hook for $3.1 million in state minimum wages, 401(k) contributions, bonuses, and employment-related taxes owed to workers, the court found. Creative Hairdressers was hit with an employee lawsuit in Florida last month over the missed paychecks.

“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,” WHD Administrator Cheryl Stanton said in a statement late Monday.

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