Donut Chain Penalized for Misclassifying Store Managers
Under the FLSA, employers cannot escape overtime requirements simply by giving employees supervisory job titles. A large chain of donut stores recently paid almost $200,000 to learn that lesson.
The DOL Wage & Hour Division (WHD) announced a $197,787 settlement of back wage claims against Dunkin Donuts. At issue was the company's practice of classifying its store managers as exempt. WHD concluded that 56 store managers should have been classified as non-exempt, based on their job duties. Another prohibited practice was discovered at two locations where management would take tips from workers to cover register shortages. This resulted in minimum wage violations.
"There are exemptions to some provisions but employers are responsible for determining exactly when and how these exemptions apply," said Patrick Reilly, director of the division's Southern New Jersey Office. "These managers worked long hours and are entitled to the protection the FLSA affords them. An employer's failure to pay overtime when required gives them an unfair competitive advantage, violates the rights of the employee, and will not be tolerated."
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