Wage/Hour Class Actions

By Karen L. Corman, Jeffrey H Dasteel and John A Donovan

There has been "an explosion" of cases in the USA where workers are claiming to have been cheated out of overtime pay. Tens of thousands of workers in a diversity of occupations have filed collective or class actions within the last few years.

The phenomenon has been strongest in California because of their overtime laws, but it has not been restricted to that state.

Companies such as Starbucks have been sued (they settled after ageing to pay out $US18m). The claims have been either on the basis of improper classification of workers, impermissible docking of exempt workers salaries and off the clock overtime work.

Improper classification revolves around the exempt and non-exempt status of work. The federal Fair Labor Standards Act sets an overtime target of time and a half after 40 hurs per week. Exemptions cover executives, administrators and professionals as well as outside salespersons. The exemption depends on the duties and pay.

Docking covers exempt employees who receive a weekly salary that is not subject to reduction for quantity or quality of work. Non-exempt employees get paid for time actually worked. There have been rulings on impermissible deductions from salaries. Off the clock claims are about non-exempt employees working through meal breaks unrecorded, for example.

(Employment Law Bulletin; vol. 8, no. 5, 2002)