- The Hair Cuttery violated the Fair Labor Standards Act (FLSA) and state law by withholding hair stylists pay for the work performed shortly before the nationwide salon's closure due to the novel coronavirus, according to a class action lawsuit (Olsen v. Ratner Co., L.C. et al. No. 20-cv-03760 (D. NJ April 7, 2020)).
- The company shut down its operations on March 21, which happened midway during a pay period that began on March 15, according to the lawsuit. The plaintiff says she and other similar workers are paid via commission except that, if the commission pay does not meet the minimum wage, then they are paid the minimum wage for that shift. The plaintiff says she was given "conflicting information" about how the stylists would be compensated, including that they would be paid for the hours worked and could use their accrued time off to fill out the days the store wasn't open. They were told next that they could not use their paid time off.
- The Hair Cuttery's parent company released a video April 3 explaining to workers that they would not get paid on April 7, saying it was waiting for federal funding and would pay the employees either through that source of money or after the company resumes operations.
This is among the first pay-related lawsuits to result from the business closures fueled by the pandemic. While many employers have turned to telework to keep employees safe and productive, other organizations have had to furlough, layoff or terminate employees, causing potential conflict with wage and hour laws.
The FLSA does not require that immediate payment be made to workers who are laid off, it might be required under state law, according to guidance from the Wage and Hour Division of the U.S. Department of Labor. The guidance also notes that in instances in which an employer's business is closed, the FLSA does not obligate employers who are unable to provide work to non-exempt employees to pay them for hours they would have otherwise worked.
In addition, WHD reminds that, if an employer directs salaried, exempt employees to take vacation or leave without pay during office closures stemming from the flu, a pandemic or other public health emergencies, salaried employees generally must receive their full salary in any week in which they perform any work.
WHD is encouraging employers to be "accommodating and flexible with workers impacted by government-imposed quarantines" and consider offering alternative work arrangements, such as teleworking, or extend extra paid time off. Employers can put into place or expand remote work policies and procedures, as appropriate, taking care not to discriminate on the basis of a legally protected characteristic such as age, race or national origin.