What are the most common wage and hour claims? First comes failing to pay people for dunning. Second comes not paying for work performed off the clock. Fourth comes docking employee’s pay for lunch hours that never happened. I am just guessing here. Wait, I forgot one: Misclassifying of workers as salaried employees. Misclassifying workers as salaried employees has got to be number 2 at least.
January 10, 2013, Rite Aid announced that it has agreed to pay– get this- $20.9 million to settle 14 lawsuits involving an estimated 6,100 employees. The lawsuits involved misclassification of salaried employees.
Under federal wage and hour laws all employees are entitled to minimum wage and overtime wage for all hours worked over 40 in a given workweek, unless there is an exemption. These exemptions are commonly referred to as white collar exemptions. If there is an exemption, then the employee can be treated as a salary employee. I.E. they are paid a salary (at least $455 weekly) no matter how many hours they work.
There is this terrible practice of randomly throwing employees into the salary employee bucket. Sometimes, it is not the right bucket. In the Rite Aid case, Rite Aid classified assistant managers as salary white collar exempt employees. Ah, you must fit the executive exemption. You are in charge of the assisting to manage the store. Your title is assistant manager.
That worked for awhile, till an employee got mad. Then they began to look at what the assistant managers really did. The workers claimed: I don’t manage. I do the work. My title as assistant manager is a misnomer. I am not an exempt employee. Hey, Rite Aid you owe me overtime and minimum wage for all the hours I worked. Oh, and the law says, you have to pay my attorney fees and double, maybe triple, what you should have paid me.
Lesson from the Court: Don’t just give employees an exempt title. Make sure that they are doing exempt stuff.