labor lawAdivision of labor law center

On September 1, 2008, the minimum wage for New Hampshire employers will increase the second time in a matter of weeks. On July 23, 2008 the state minimum wage was $6.50 per hour. The federal minimum wage increase on July 24 meant that most New Hampshire employers had to pay $6.55 per hour.

The New Hampshire minimum wage will increase again on September 1, when the state rate goes up to (more…)

Think you’re having a bad day? It could be much, much worse. Wal-Mart recently agreed to pay more than $33 million to some 86,680 employees for violations of the overtime provisions of federal and New Hampshire overtime laws. The company uncovered the violations during an internal audit, and voluntarily disclosed them to the US Dept. of Labor.

As part of the settlement, the retail giant has agreed to pay interest on the back wages, and to correct its payroll accounting in the future.  Wal-Mart is headquartered in Bentonville, Arkansas and is the nation’s largest retailer. The corporation operates almost 4,000 stores in the country, including Wal-Mart Discount Stores, Neighborhood Markets, Sam’s Club warehouse stores and Wal-Mart Super Centers.

The world’s largest private-sector employer was founded by Sam Walton, a billionaire famous for his homespun wisdom and unassuming manner. In recent years, however, the company has faced a number of legal woes including allegations that some managers locked employees in the stores at night to prevent theft.

To finalize the agreement, the Labor Department filed a complaint in U.S. District Court against Wal-Mart Stores Inc. The complaint alleges violations of the FLSA overtime provisions as well as state minimum wage laws. A consent judgment ordering the company to pay back wages and enjoining it from further violations was filed at the same time. The consent judgment was promptly approved by the court.

The company employs about 1.8 million workers world-wide, including about 1.3 million in the US. Wal-Mart, which is the largest private sector employer in the world, has come under pressure from labor groups and political figures that demand higher wages and better benefit plans. Wal-Mart has defended its employment policies, saying the company creates jobs and has reduced health-care costs for all Americans by selling prescription drugs at discounts.

Beleaguered retail giant Wal-Mart, Inc. recently settled a suit with the US Dept. of Labor regarding violations of federal and New Hampshire minimum wage laws. Under this agreement, Wal-Mart agreed to pay $33 million in back wages and interest to nearly 87,000 employees in New Hampshire and throughout the country.

This is just the latest in a round of payroll issues for the giant retailer. According to sources, this agreement resolves only the specific violations identified in the consent judgment. It does not affect any ongoing private litigation or workers’ ability to file complaints with the Labor Department.

Wal-Mart is certainly not the first employer to try to avoid overtime in this way.  In the early 1980s, hospitality giant Howard Johnson’s was found guilty of a similar tactic. The chain would hire “assistant managers” for their restaurants, who then worked 80 or more hours per week washing dishes, busing tables and taking customer’s orders. Fortunately for employees, that tactic didn’t work then, and it won’t work now.

The US Dept. of Labor ruled that these employees, who were often required to work long hours for little money, were in fact “non-exempt salaried” employees. That means that they were salaried employees who are entitled to overtime pay.

Many workers assume that anyone who is paid on a salaried basis is exempt from overtime under the federal and New Hampshire minimum wage laws, but they are mistaken. Within the past few years, new guidelines have been issued that require anyone earning less than $455 per week ($23,660 per year) to be paid overtime when they work more than 40 hours per week.

The argument in this case is that the manager trainees were required to work long hours, but had little decision-making power and didn’t supervise any employees. In some cases, they were paid much less than $23,660 per year or $455 per week.

New Hampshire is a pretty standard state when it comes to overtime. It does have it’s own “quirks” when it comes to how it governs the payment of overtime. For the most part, though, it follows the general guidelines put out by the federal overtime laws in the Fair Labor Standards Act.

A key differentiator, however, for New Hampshire that we should be certain about is the fact that it provides overtime for most all employees in the state who are entitled to it. Federal law, on the other hand, only covers employees for certain larger companies and companies that do business across states.

By business across states, I’m talking about interstate companies that either have offices in states outside of New Hampshire, and/or businesses that conduct business or sales, or try to, outside of New Hampshire. Another qualification to make a company have to follow the federal law is if it pulls in more than $500,000 per year in revenue.

Also, certain types of businesses are automatically required to follow the federal overtime guidelines, no matter how big they are. These include hospitals, schools of all kinds, and all types of local, state, and federal government offices.

That being said, New Hampshire law covers overtime for nearly everyone else. It requires that employers pay time and a half to all employees who work more than 40 hours in a week.

Then again, not all employees get overtime pay. Some are excluded from the New Hampshire overtime law, including people who work for amusement, entertainment, or seasonal recreational businesses that are not open for more than seven months out of the 12, or those that earn more than two-thirds of their income in a six-month period in the year.

New Hampshire law also makes it clear that anyone excluded in the FLSA, or federal laws, does not get overtime in the state either.