U.S. Department of Labor Cracks Down On Businesses For Covid-19-Related Violations

On the East Coast, the U.S. Bankruptcy Court for the District of Maryland ordered a company that operates hair salons in 15 states and the District of Columbia to pay $1,149,965 in back wages to over 7,500 employees.  When 750 salon locations were closed amid the Covid-19 pandemic, the business failed to pay their employees’ final wages.  This violated the minimum wage and overtime provisions of the Fair Labor Standards Act.  The company then filed for Chapter 11 bankruptcy.  Once the DOL learned of the company’s failure to pay employees and that the employer filed for bankruptcy, DOL sought to intervene as a creditor, which was granted.  Bankruptcy did not absolve the business of payment of employees’ final wages.  

In Hawaii, a retail store agreed to pay an employee $800 in back wages after an investigation by the DOL’s Wage and Hour Division.  The store denied the employee paid leave to care for their child whose school closed due to Covid-19, violating the Emergency Paid Sick Leave Act provision of the FFCRA.  The store also agreed to display the Families First Coronavirus Response Act poster.  

A truck driver in Indiana who was denied emergency paid sick leave while he was experiencing Covid-19 symptoms and was seeking a medical diagnosis received $3,017 in back wages. After an investigation by the DOL’s Wage and Hour Division, his employer was found to have violated the Emergency Paid Sick Leave Act provision of the FFCRA.  

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