Memphis retailer pays $1.9 million in overtime lawsuit
On Oct. 15, a Memphis-based clothing company announced its intention to pay $1.9 million to employees in back overtime pay.
The class-action suit was filed in December 2012 by two employees, who accused the clothing store of failing to pay more than $25 million in overtime compensation to managers and assistant managers who were wrongly classified as exempt. The plaintiffs claimed the company used the exemption to avoid paying the employees for overtime and continued to dock their pay if they did not work a full 40 hours. The policy is in direct violation of the Fair Labor Standards Act, which makes it illegal to pay exempt employees only for a certain hours, according to the U.S. Department of Labor.
The settlement will reach roughly 280 store managers and assistant managers affected by the company's policies. Law360 calculates that 46 members of the class-action suit will receive more than $10,000, 59 members will receive between $1,000 and $5,000, with the remaining plaintiffs receiving less than $1,000.
Employers should take care to remain in compliance with federal and state labor laws and ensure workers are properly classified. Failure to conform to these standards can result in lawsuits that cost companies time and money. Using time and attendance software to accurately report employee time can also help workplaces abide by legal requirements.
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