In a Nebraska lawsuit against Famous Dave’s restaurant chain, the appeal court upheld the lower court ruling that the employer should have known that employees were working a more than one Famous Dave’s location.
The restaurant chain is based in Minnesota and has both franchise and company-owened locations throughout the Midwest.
The court found that most Omaha restaurants had policies prohibiting employees from working at more than one location. When an employee had permission to work at several locations, the employer had a system in place to combine the employees hours to calculate overtime.
However, Famous Dave’s had no policy prohibiting employees from working at more than one location. A number of employees did work at two or more locations. Their hours were not combined to calculate overtime, (more…)
Wal-Mart must pay $33 million in back wages to more than 86,600 employees after failing to compensate them enough for their overtime work over roughly five years.
Noting that the settlement includes both the $33 million and interest to the Wal-Mart employees, Victoria A. Lipnic, Assistant Secretary of Labor for Employment Standards, said the company “has taken corrective action to prevent this from happening again.” The agreement covers pay for the employees during the period from February 1, 2002 to January 19, 2007.
The law requires that most employees be paid “time-and-a-half,” or 1.5 times their pay, for any time worked over 40 hours a week. That was not the issue in the Wal-Mart case. The issue was how Wal-Mart calculated the employees’ pay. The retail giant used the employees’ “base rate,” not their “average hourly compensation.”
The average compensation includes premiums and incentives, and so is a larger figure. For example, if the employee’s base rate is $6 an hour and his or her average hourly compensation is $7 an hour, the law requires that the overtime be calculated as 1.5 times the $7 an hour. Wal-Mart was using the base rate of $6 an hour instead.
The incentive behind the settlement may have been provided by a court judgment supporting the agreement. The Labor Department filed a complaint in U.S. District Court against Wal-Mart alleging violations of the FLSA overtime regulations and state minimum wage laws. The court issued a consent judgment ordering Wal-Mart to pay the back wages, and it directed the retailer against future violations. The consent decree includes not only payment of the back wages, but has Wal-Mart agreeing to pay interest on the amount.
The Labor Department said the nationwide retailer had violated the Fair Labor Standards Act, or FLSA, when it calculated the overtime on base rate rather than average hourly compensation. It also violated states’ minimum wage laws, according to the Labor Department.
Nebraska has no overtime labor law of its own. So where does this leave us? What can we talk about if the state we want to discuss doesn’t have the law we need to talk about. Well, technically Nebraska does have overtime regulations—those passed down by the federal government. So we can talk about those.
The federal overtime laws can be found in the Fair Labor Standards Act, or FLSA for short. The Fair Labor Standards Act also covers minimum wage issues, as well as issues of child labor, but for the intent of this blog at the moment, we will only focus on the parts of the Fair Labor Standards Act that deal with overtime.
These overtime labor laws basically are only laws for certain businesses. For instance, your local, mom and pop type business in Nebraska—with only one store in one town, for example—is not held to the standards of the federal Fair Labor Standards Act.
Instead, the Fair Labor Standards Act only covers larger businesses. They must meet certain qualifications to be held to the Fair Labor Standards Act. First, the businesses must be interstate businesses, meaning they have offices in other states than Nebraska, or they conduct business by selling or offering services or goods to customers in other states than Nebraska. The businesses must also bring in a certain amount of revenue—in this case, it’s more than $500,000 per year.
Certain other types of businesses are included in the Fair Labor Standards Act, too, regardless of their size. Hospitals, schools of all types, and government organizations are all included in the Fair Labor Standards Act regulations for overtime.
And the basic tenant of the Fair Labor Standards Act? It is that employees of these companies who work more than 40 hours in a work week have to get paid time and a half their normal rate for every minute over those 40 hours.