Under the Fair Labor Standards Act (FLSA), employers are required to pay overtime to all employees who spend more than 8 hours a day or 40 hours a week on the job. Every hourly employee, except those who are exempt, are entitled to 1 ½ times their normal hourly wage for the overtime hours that are worked. Overtime violations often involve miscalculation of time or wages, as was the case against Bed Bath & Beyond.
Allegations against Bed Bath & Beyond
Employees of the retail chain Bed Bath & Beyond alleged that the company miscalculated the overtime wages earned by both customer service representatives and managers working at several of its New Jersey locations. According to the lawsuit, these employees were paid annual salaries ranging from $63,000 to $70,000. Instead of calculating their hourly rate based on their annual salary, Bed Bath & Beyond used their weekly base salary and divided it by the number of hours worked each week. Based on this odd formula, the company then divided the resulting number in half, multiplied it by the number of working hours that exceeded 40 in a particular week. In addition to violating the FLSA, this formula resulted in the managers and customer service representatives ultimately being paid less than the required minimum wage for all hours worked.
Exemptions to the FLSA overtime requirement
Under the FLSA, some employees are exempt from the overtime requirement if their salaries are at least $23,600 and they meet very specific conditions. Some of those conditions include providing administrative assistance directly to an executive, spending more than half their time at work managing other employees, and exercising a particular set of skills or level of education in the course of performing their jobs. Management duties can include weighing in on the hiring and firing of employees. Employees who do not meet these conditions, and are therefore non-exempt, must be paid overtime compensation for all hours worked beyond eight hours a day or forty hours a week.
Misclassification claims against Bed Bath & Beyond
Another allegation brought by the class was that they were misclassified in order to make them exempt from overtime pay. Specifically, these managers and customer service representatives allege that, despite having those titles, they spent most of their work hours performing mundane tasks that were typically done by hourly, nonexempt employees. For example, many of those employees stock merchandise, unload freight and help customers. These managers had no authority to hire or fire other employees and did not spend the majority of their time actually managing other employees.
Misclassification has become a common violation
When an employer misclassifies employees so they become exempt from wage and hour laws it is a violation of the Fair Labor Standards Act. According to the Department of Labor, there has been a steady increase of employers misclassifying workers as
independent contractors in certain industries, including construction and technology, as well as misclassifying managers.
If you feel you have been the victim of wage, hour or overtime violations, or if you have any questions regarding your employment rights, please contact Wrady & Michel, LLC, either online or by calling us at (205) 265-1880