In the national scramble to close businesses amid the coronavirus pandemic, issues will undoubtedly arise regarding time worked and wages earned before the doors closed.
Among many others, the personal care industry – consisting of hair salons, nail salons, spas, massage services and similar establishments – has been heavily impacted by government orders intended to reduce the spread of COVID-19. The close contact between workers and customers makes the environment an obvious health concern, reflected by multiple state orders to temporarily close salons.
Wage and hour class action suit
Federal and state wage and hour laws not only require employers to pay employees at least the applicable minimum wage and overtime rates for all hours worked, but also to pay employees in a timely manner.
Since 1994, New Jersey resident Nicole Olsen has worked as a stylist for Hair Cuttery, a salon enterprise owned and operated by Ratner Companies L.C., based in Virginia. According to its website, Hair Cuttery is the “largest privately-held salon chain in North America … encompass[ing] approximately 12,000 associates with 806 salons in 16 states.”
On April 7, Olsen filed a federal class action lawsuit in U.S. District Court in New Jersey, alleging that Ratner has not paid her and other similarly situated employees their wages from a partial pay period that began on March 15 and ended on March 21 when Ratner abruptly closed its salons. The regular payday for that period was April 7.
Olsen alleges that Ratner has provided varying information about the status of her owed wages, but did not pay her on April 7 as it was required to do.
Fair Labor Standards Act and state labor law
Olsen filed her lawsuit under the federal Fair Labor Standards Act (FLSA) and the New Jersey Wage Payment Law (“NJWPL”), alleging that Ratner failed to pay her at least minimum wage for the hours she worked from March 15 to March 21.
Under the FLSA, Olsen is seeking to recover her unpaid wages as well as liquidated damages (an additional amount equal to her past due wages), legal costs, and attorneys’ fees. Olsen also sued under New Jersey law, since some state laws provide greater or additional remedies than those available under the FLSA. Specifically, the NJWPL allows employees to recover liquidated damages up to 200% of their unpaid wages, whereas the FLSA only provides for 100% liquidated damages.
Olsen also brought her FLSA claims as a collective action, meaning that other Ratner employees who were also not paid for the work they performed from March 15 to March 21 may be able to opt-in to Olsen’s lawsuit as additional plaintiffs without having to bring their own lawsuits. Collective and class actions can be an effective way to litigate claims for groups of individuals with similar or identical claims, since many of the legal and factual issues involved are common to all of the plaintiffs. This includes wage and hour cases in which an employer is alleged to have violated minimum wage, overtime, or other labor laws by imposing unlawful policies and practices on its employees.
It will be interesting to see how this case is resolved. It may be a bellwether for other, similar unpaid wage claims stemming from COVID-19 business closures or employee layoffs.