Wal-Mart Stores, Inc. reached a recent settlement agreement that will enable the retail giant to comply with both federal and Rhode Island overtime laws. At the heart of this agreement is the method in which the nation’s largest retailer calculated the overtime they paid employees. The US Department of Labor maintains Wal-Mart did not correctly calculate overtime and did not properly pay overtime to employees.
The law is that overtime should be calculated at 1.5 times the employee’s usual salary rate for hours that exceed 40 during the week. This usual rate should include incentives and premiums. Wal-Mart didn’t include the incentives and premiums when calculating overtime.
For instance, if an employee’s base rate is $6.00 per hour but with premiums and incentives, he or she normally earns $7.00, then overtime should be calculated using $7.00 as the employee’s base rate. Because Wal-Mart violated the Fair Labor Standards Act (FLSA), the retailer needs to pay 86,680 employees back pay. These employees worked between February 1, 2002 and January 19, 2007.
According to Victoria A. Lipnic, Assistant Secretary of Labor for Employment Standards, “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.”
The agreement not only has Wal-Mart pay back wages buy also interest on those wages. The interest is included to be a deterrent again this transgression being committed again at some future time. The agreement was finalized by the Labor Department filing a complaint. This complaint was filed in the U.S. District Court and it alleges that the retailer committed violations of both state minimum wage laws and FLSA provisions.
A consent judgment was issued that ordered Wal-Mart Stores, Inc. to pay employees for back wages. This consent judgment also enjoined the retailer from further violations. The court quickly approved the consent judgment.
What makes overtime law in Rhode Island different than the overtime labor laws in the other 49 states and Washington, D.C.? Well, it isn’t the legal standard of the work week. Sure, as we have seen, there are some states that don’t follow the standard work week length, set out in the federal Fair Labor Standards Act. That length is 40 hours per seven-day period.
Some states may have different standard lengths, but Rhode Island on the other hand uses 40 hours as its standard work week length. The state also follows the guidelines we have seen in many other states—as well as with the federal law in the FLSA—that employers are required to pay employees a premium overtime payment rate of one and a half times the employee’s normal wages for any and all time spent working over those 40 hours.
Now where does Rhode Island chart its own course with its overtime labor laws? It’s in the exclusions, or the rules that dictate which occupations and job types don’t necessarily have to get paid overtime premium pay for hours spent working over 40 in a week.
These excluded occupations include any employee of a summer camp that’s open for less than six months out of the year. Police officers, fire fighters, and any other rescue personnel who are employees of towns and cities don’t have to get paid overtime, according to the Rhode Island law.
Also excluded are state employees, and any other local government official for the state, who can instead request to use compensatory time off instead of overtime pay. That means that if I worked for the state, and put in 44 hours one week, the next week I could ask to be compensated those four hours and then only have to put in 36 hours that week.
Another occupation group who can ask for compensatory time off instead of overtime premium pay is nonprofit workers at voluntary health agencies who make salaries.
Recently, I’ve been researching state lunch and break laws, as well as other work-hour related issues. Up until recently, Rhode Island was one of a number of states that mandated meal breaks for employees. This law was repealed on July 19, 2005. Efforts are being made to re-introduce legislation that would once again give workers breaks mandated by law. Meanwhile, residents of the state should know that they are covered by several federal regulations related to this area.
Federal law does not mandate any specific meal or rest breaks. It does, however, give guidance as to whether or not an employee should be paid during these times. Short breaks (usually 20 minutes or less) should be counted as hours worked. True “meal periods” are usually 30 minutes or more, and do not need to be paid as work time. During an unpaid meal break, a worker must be completely free of his or her work duties. If the employee is still required to do any duties (even minor duties such as answering a phone), it can’t be considered a meal or lunch period and must be paid.
Federal law also contains regulations related to employee pay during times of waiting, sleeping and traveling. Whether or not waiting time needs to be considered paid work hours depends on the circumstances.
If an employee is at the workplace and allowed to do something of his or her choosing while waiting for one task to be finished or for another to begin, it is generally considered paid work time. A common example of this might be a fire fighter reading a book at the station while waiting for fire calls. On the other hand, if an employee is “on call” at home or elsewhere and waiting to be called upon, it is not generally considered paid work time. For this to be the case the employee must also have great freedom to do what he or she wishes while on call and have plenty of time to respond to the calls.
When it comes to travel time, the principle to observe is that time spent in the normal day’s commute to and from work is not considered paid working time. However, if an employee is traveling in the course of a days work, it must be considered paid work time.
Another final issue of interest may be sleeping time. An employee required to be on duty less than 24 hours is considered to be “working” even if he or she is permitted to sleep during some of those hours when not busy. If an employee is on duty more than 24 hours, a sleeping period of no more than eight hours may be subtracted from work hours. However, this can only be done if sleeping quarters are provided and at least five hours of uninterrupted sleep may be achieved by the employee.
A listing of state and federal regulations relating to lunch and break law may be found on the Rhode Island Complete Labor Law Poster. This poster also features information on all other state and federal labor law requirements.