For years, employers have used a variety of tactics to cut back on paying their employees overtime wages. Now they are paying the price as a surge of class action lawsuits flood into courtrooms. Compared to 2008, 2011 had a 32 percent increase of employees suing their employers for unpaid overtime.
Some employers, like supermarket chain Publix, used the fluctuating workweek or “Chinese Overtime” payment system. In this system, employers pay employees the same rate every week regardless of hours worked, except for overtime. When overtime kicks in, the rate drops to half the hourly rate.
The fluctuating workweek payment schedule is legal as long as certain conditions are met. The former general managers suing Publix argues that that system of payment was not appropriate for their position. They filed a class action lawsuit against the supermarket chain for lost wages under this system and for not properly calculating bonuses into the managers’ overtime.
Overtime payment is at the heart of another class action lawsuit, this one involving sales representatives from the pharmaceutical company GlaxoSmithKline. The sales reps allege that they deserve overtime for working an extra 10 to 20 hours a week, but the company says that sales positions are exempt from overtime due to the Fair Labor Standards Act. Unlike most sales representatives, however, pharmaceutical salespeople do not receive a commission when they make a sale. The case, currently under review by the Supreme Court, will have a ruling by June 30, 2012.
Other methods used by employers to skirt overtime included forcing workers to work off the clock and misclassifying fulltime employees as tax-free independent contractors.
Times are tough and money is tight for several businesses, but that is no excuse for treating employees unfairly. The recent influx of unpaid overtime lawsuits will continue until employers properly classify and compensate their employees.
Sarelson Law Firm – Miami class action attorneys