An aerospace defense contractor based in Broomfield, Colorado was ordered to pay almost $1 million in back wages to 904 employees in four states plus the District of Columbia.
The U.S. Department of Labor charges that Ball Aerospace and Technologies, Inc. failed to pay $976,327 in overtime to employees in Colorado, New Mexico, Ohio, Georgia and Washington D.C.
According to sources, an investigation showed that once senior technicians reached the maximum hourly rate, they were arbitrarily and unlawfully changed to salaried-exempt status. The change in pay rate did not include a significant increase in responsibilities. Under federal law, in order to be exempt from overtime pay, employees must have decision-making powers, significant administrative duties or they must supervise three or more people. None of those conditions were met for the 111 technicians in question, so they are due $383, 235 in unpaid overtime.
In addition, all employees were routinely required to work through their lunch periods without any pay. Even if they were not able to take a lunch break, an hour was deducted from their time cards every work day. This violation resulted in payments of $593,092 to 793 employees.
Ball agreed to keep more accurate payroll records in the future, in compliance with the Fair Labor Standards Act or FLSA, and to pay all required wages to employees in the future.
In late July, the U.S. Department of Labor forced Desert Plastering, Inc., a Las Vegas Nevada firm, to pay nearly $1.2 million in back pay to 1060 employees. The feds found that Desert Plastering had not paid required overtime to lathers, finishers, plasterers and estimators who worked up to 58 hours per week.
In early July, the U.S. Department of Labor forced 107 subcontractors of KBR, Inc. of Virginia to pay some $1.5 million in back wages and benefits for up to 2,600 workers who participated in the Hurricane Katrina recovery project. The construction workers were involved in repairs to the Naval Construction Battalion Center in Gulfport Mississippi or the Naval Air Station/Joint Reserve Base in Belle Chasse, Louisiana. The U.S. Department of Labor is still searching for some of the workers involved in that case. Anyone who believes that they are owed back wages for these projects can contact the nearest U.S. Department of Labor office. The average payment per worker in that case was $616.
Earlier this year, under a voluntary agreement to prevent a federal suit, Wal-Mart, Inc. agreed to pay $33 million in unpaid overtime wages to 86,680 employees throughout the nation. An internal audit revealed that the company had incorrectly classified some employees as “salary-exempt” when in fact they were entitled to overtime pay. In other cases, the company admitted that it had based overtime pay on the employee’s base hourly rate, not including incentives and bonuses in the employee’s average rate as required by law.
The Fair Labor Standard Act requires that most U.S. employees be paid at least the federal minimum wage, which is currently $5.85 per hour. The FLSA also mandates that employees must be paid 1.5 times their usual hourly rate for each hour over 40 in a single work week.
Many employers mistakenly believe that any worker paid by salary is exempt from overtime. The FLSA does provide a number of exemptions to the overtime law for bona fide executive, administrative, professional and outside sales jobs. In general, employees must meet job duty and salary tests, to be exempt from overtime.
The U. S. Department of Labor Wage and Hour Division collected more than $171 in back wages for some 246,000 employees in 2006. Thos wages were a result of 31,987 “compliance actions” in 2006.
The US Dept. of Labor recently announced that Wal-Mart Stores, Inc. has agreed to pay more than $33 million in back wages to comply with federal and New Mexico minimum wage laws.
To its credit, Wal-Mart voluntarily approached the US Dept. of Labor when an internal audit revealed New Mexico minimum wage violations. “This settlement provides $33 million in back wages, plus interest, to Wal-Mart workers, and the company has taken corrective action to prevent this from happening again,” said Assistant Secretary of Labor for Employment Standards Victoria A. Lipnic. At issue is a question of how the company computed overtime pay for workers in New Mexico and throughout the nation.
The minimum wage issue revolves around how Wal-Mart treated incentives and other premium payments in the calculation of employee overtime. By law, employees are entitled to an overtime rate based on their average hourly compensation.
If an employee is paid $6.00 per hour, but normally earns $7.00 per hour with incentives and premiums, then he or she is entitled to overtime based on 1.5 times the $7.00 hourly rate. Wal-Mart was paying overtime of 1.5 times the base rate, only. The were also not paying required overtime to some management trainees who worked long hours for low wages.
According to the US Dept. of Labor, the nation’s largest retailer violated the Fair Labor Standards Act (FLSA) by not properly paying overtime to employees who worked more than 40 hours in a single week. Under the FLSA, employees are legally entitled to payment at an overtime rate of 1.5 times their usual rate, for each hour worked in excess of 40 per week. This agreement covers back wages for some 86,680 employees between February 1, 2002 and January 19, 2007.
Under the terms of the recent consent decree, Wal-Mart has agreed to pay all back wages for the violations. The company has also agreed to pay interest on the amount, as a deterrent against committing the same transgressions in the future.
New Mexico has gotten in line with the new federal overtime regulations, or the new FairPlay rules, as they are called. These new laws came into effect in August of 2004, and they basically change the playing field that had originally been established by the Fair Labor Standards Act that was written in the 1930s.
The new FairPlay rules guarantee overtime pay for all employees who earn less than $23,660 per year, or $455 per week. This includes more than 6.7 million people across the entire United States. Many of these people under the old rules didn’t get overtime. About 1.3 million of them we’re talking about.
Many of the same exceptions to the overtime rules, for people who on the other hand do not get overtime from the federal laws, remain included in these new rules on the federal level and in New Mexico. These include people who are considered “bona fide” professional, executives, and administrators.
This list includes many white-collar salaried employees, such as teachers and principals and other academic administrative type people for elementary, junior high, and high schools. It also includes people involved in outside sales, and many people who are involved in the computer and IT business.
In New Mexico, there are several other types of workers who are excluded from overtime pay. These include any workers who are participating in the agricultural business.
Another law in New Mexico that we should consider is the one that says that employees are not entitled to “compensatory time off” instead of overtime pay. Basically, what this means is that if you work, say, 46 hours in a week, your employer cannot then allow you to use those extra 6 hours as time off later in the month. Even if you want that, it’s not allowed. That employer must always pay you the overtime rate for those 6 hours.