Federal Court Secures $3.8M Judgment Against Retail Chain for Unlawful Uniform Deductions

CHICAGO, IL — The U.S. Department of Labor (DOL) secured a comprehensive $3.8 million consent judgment in the U.S. District Court for the Northern District of Illinois on Tuesday against a national discount retail chain for widespread wage violations under the Fair Labor Standards Act (FLSA).

Unlawful Deductions Reducing Wages Below Statutory Minimums

The Wage and Hour Division (WHD) investigation revealed that the retailer systematically deducted uniform purchase fees, branded nametag replacement charges, and register drawer cash-shortage fees directly from hourly employee paychecks across more than 120 store locations.

Federal investigators determined that these mandatory paycheck deductions frequently reduced workers' effective hourly pay rates below the federal statutory minimum wage of $7.25 per hour, while violating overtime calculation standards for employees working over 40 hours per week.

Back Pay Restitution and Civil Money Penalties

Under the court-approved judgment signed by U.S. District Judge Sara Ellis, the retail chain will disburse $3.1 million in back wages and liquidated damages to over 14,000 current and former hourly workers, alongside $700,000 in federal civil money penalties.

Regional Solicitor of Labor Christine Heri affirmed that requiring minimum-wage retail workers to subsidize corporate operating costs and mandatory uniforms is an illegal practice that the Department of Labor will vigorously prosecute.

Nationwide Corporate Compliance and Third-Party Audits

The court order mandates that the company retain an independent payroll auditor to conduct biannual wage compliance audits across all corporate store locations through 2029.