Why American Apparel Workers Didn’t Get Paid Last Week
Clothing retailer American Apparel has been having a rough go of things for the past couple of year: Young people falling out of love with its hipster-goes-to-aerobics look and sales tanking, founder and (former) CEO Dov Charney getting fired for alleged misconduct, a bankruptcy filing last year as sales continued to fall, then Charney trying twice to buy back the company he founded in 1989, bankrolled by investors who, as of this week, were willing to spend $300 million to reinstate him back at the helm of the troubled company.
With that by way of backstory, the retailer didn’t need to miss a deadline to pay its employees. But according to leaked emails obtained by Business Insider, that’s exactly what happened: The site reported that American Apparel “temporarily missed its payroll” deadline for U.S. workers last week. “There has been no resolution and US retail and Headoffice staff remain unpaid,” a source told Business Insider on Monday.
Current CEO Paula Schneider sent a letter to employees Monday blaming a procedural failure at Duetsche Bank for the missed payroll and saying the company’s long-running financial woes had nothing to do with it. “We are also working with ADP to prevent this type of situation from occurring in the future,” she wrote, and said the company would reimburse workers for any penalty fees they incurred when their pay was delayed.
This article was originally published on Money.com.