If you’re an employer in Virginia, are you aware that not all salaried employees are exempt from overtime?
In fact, federal and Virginia minimum wage law violations were at the heart of a settlement Wal-Mart, the retail giant, reached in a suit brought by the US Department of Labor. Wal-Mart has to pay 87,000 workers in Virginia and around the country $33 million in not only back wages but also in interest.
This isn’t the first time Wal-Mart has had issues with its payroll system. Moreover, this settlement only applies to certain violations. The judgment outlines these violations. Private litigation is not impacted by this settlement, nor is any worker’s ability to file complaints against Wal-Mart with the Department of Labor.
The settlement resolves a dispute on how some salaried employees were paid. These employees included manager trainees, interns, and programmer trainees. These employees often were paid low wages yet they worked long hours. According to the ruling by the US Department of Labor, these workers actually were “non-exempt salaried” employees. When employees are “non-exempt salaried,” they are entitled to be paid for overtime.
Whether the salaried employees are entitled to overtime depends on the duties assigned to their jobs. New guidelines adopted in recent years affect employees whose weekly earnings are less than $455 ($23,660 per year).
These guidelines require that employees who earn less than $455 per week be paid overtime for any hours over the normal 40. If employees earn more than $455 per week, they still may be entitled to overtime pay if they do not have the power to make significant decisions regarding a department, store, or division.
Other claims against Wal-Mart are not addressed in this settlement. This settlement only resolves certain violations that are defined in the judgment. This agreement does not impact any litigation brought against Wal-Mart by private parties, nor does it impact the ability of any worker to file a complaint against Wal-Mart with the US Department of Labor.
Wal-Mart isn’t the first business to try to avoid paying employees overtime. Howard Johnson’s was found guilty of using an approach similar to the one used by Wal-Mart. In the case of the hospitality businesses, “assistant managers” worked long hours for low pay.
What would you do if your company were accused of breaking the law? That’s the question faced recently by a Texas business. The firm, ABC Professional Tree Services, must pay $1,801,507 in back wages to 2,501 employees in 16 states. It was accused of violation of the minimum wage laws and the federal Fair Labor Standards Act (FLSA). The probe began when investigators received a tip from an employee.
Labor law investigators have caught up with a tree-trimming firm that paid at least 2,500 workers below minimum wage, and the company will have to pay nearly $2 million in back wages to about 2,500 employees.
The company, ABC Professional Tree Services of Houston, Texas, was found in violation of federal and Virginia overtime laws. The amount it has agreed to pay is $1,801,507.
According to the federal FLSA, any covered employees must be paid at least $5.15 per hour, the minimum wage, for the first 40 hours of any work week. After that, employees must receive time-and-a-half for overtime. Accurate payroll record keeping is also required.
The company is paying back wages to its Virginia employees as well as to employees from Maryland, Texas, New Jersey, Ohio, South Carolina, North Carolina, Maine, New York, Arkansas, Virginia, Tennessee, Mississippi, Georgia, and Louisiana.
U.S. Secretary of Labor Elaine L. Chao said the Labor Department is pleased that “we were able to help these workers get the back pay they deserve.” She said the department would continue monitoring to make sure employers are paying the legal amounts to employees.
The investigation started when a dissatisfied worker tipped the Department of Labor about the violation. Labor Department officials found that the company was in violation in 16 states.
U.S. Attorneys in several states have teamed up with the Labor Department on a task force that both investigates and prosecutes labor law violations in the Gulf Coast region, particularly regions affected by hurricanes, including Hurricane Katrina and Hurricane Rita.
Virginia technically does not have an overtime labor law of its own. Should we just brush it aside and pay it no mind? Of course not! Like many other states that don’t have their own state overtime laws, Virginia still follows the federal guidelines for determining who gets overtime pay and what they get paid for overtime hours.
The federal law, generally speaking, says that employers must pay their employees time and a half their normal pay rate whenever the employees work more than 40 hours in a week. This regulation comes from the federal law, the Fair Labor Standards Act, or FLSA for short, which is overseen by the U.S. Department of Labor in the Labor, Wage, and Hour Division.
That means in Virginia, if an employer has a question about paying overtime, or if an employee is wondering about overtime pay, they need to contact the federal authorities to get the definitive answer. The closest federal office in Virginia isn’t all the way up in Washington, D.C., though. It is in the state capital of Richmond in a district office of the Department of Labor.
That office can be contacted directly with any overtime concerns. Or the main Department of Labor office can also be contacted by phone.
Some issues, however, we can cover here where we still have room in my blog. For instance, under the federal law, an employer does not have to necessarily pay time and a half to employees who work on weekends or during holidays. That pay rate is up to the employer to decide. What matters most is how many hours an employee worked in a week, and whether or not that amount is over 40.
It is also important to know that all businesses in Virginia don’t have to hold themselves to the FLSA standards. Interstate businesses and/or those that make more than $500,000 in revenue per year must follow the rules, as do hospitals, schools, and government entities.