Hair Cuttery's Parent Company Ordered To Pay Back Wages In MA

The U.S. Bankruptcy Court for the District of Maryland has ordered Creative Hairdressers Inc. - parent company of Hair Cuttery, BUBBLES The Color Salon, Salon Cielo and Salon Plaza - to pay $1,149,965 in back wages to more than 7,500 employees in 15 states, including Massachusetts and the District of Columbia.

The action came after the U.S. Department of Labor's Wage and Hour Division found that Creative Hairdressers Inc. closed all of its 750 salon locations on March 21 amid the coronavirus pandemic and failed to pay their employees' final paychecks.

Creative Hairdressers Inc. filed for Chapter 11 bankruptcy protection and was bought by another company. Investigators said in failing to pay employees' final paychecks, the company violated the minimum wage and overtime provisions of the Fair Labor Standards Act.

"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," Cheryl Stanton, Wage and Hour Division Administrator, said in a statement. "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."

In addition to back wages, the court ordered Creative Hairdressers Inc. to pay approximately $3.1 million to satisfy state minimum wages, 401(k) contributions, bonus program payments and applicable employment-related taxes.

Creative Hairdressers announced Monday it has received approval for certain bidding procedures in connection with the sale of substantially all of its assets to a new owner. The court-supervised auction process is designed to secure the highest and best offer for the company's assets.

Phil Horvath, president of Creative Hairdressers, said in a statement to the Associated Press the company is "excited about our long-term potential" and "looking forward to re-opening our doors and meeting the pent-up demand from people who are eager to look and feel their best again."

The company has hair salons in Arlington, Burlington, Charlestown, Chicopee, Danvers, Framingham, Hyannis, Littleton, Medford, Milford, Plymouth, Revere, Springfield, Stoughton, Ware, Wareham, Watertown, West Springfield, Westfield, Wilmington, Woburn and Worcester.