The federal Fair Labor Standards Act (FLSA) requires employers to pay all of their hourly workers at least the minimum wage of $7.25 for each hour worked. Any time that an employee spends working after eight hours a day or forty hours a week must be paid at the premium overtime rate of one and one-half times the employee’s normal hourly rate. There are exceptions to this rule, but the federal Act is very specific about the types of employees that qualify for these exemptions. They must be paid an annual salary of at least $23,600 and fit into either the administrative, executive, or professional category.
In order to qualify for overtime exemption under the administrative category, an employee must perform primarily office work and provide assistance directly to an executive. For the executive category, an employee must spend the majority of her time managing other employees and must have significant say in the hiring, firing, and discipline of the employees she manages. The professional category consists of those employees whose jobs require higher education or a certain set of skills to perform. This category includes doctors, writers, and actors.
The executive category is probably the most misunderstood. Frequently, employers label all of their managers or supervisors as exempt from overtime under the executive category, even if the employees do not meet the requirements. Workers with the title of manager who spend most of their time at work performing the same duties as hourly employees are still entitled to the proper overtime compensation of one and one-half times their normal hourly rate in the event that they work more than eight hours a day or forty hours a week.
According to a recent class action lawsuit against Genco Distribution Systems Inc., the logistics company allegedly labeled its Operations Supervisors as exempt from overtime compensation in violation of the FLSA. The lawsuit further alleges that the company participated in unfair competition by refusing to properly classify its Operations Supervisors as non-exempt employees under the FLSA. By paying their employees a fixed salary, Genco allegedly saved labor costs which would not be saved by competitors who pay all of their workers in accordance with the law.
Genco continues to deny having done anything illegal, but has agreed to settle the lawsuit outside of court. Such a measure is common when lawsuits can drag out in the courts and quickly accrue legal expenses for both sides. Since the outcome of a trial is always uncertain, Genco gets to avoid a lengthy litigation which might not end in its favor, and save face.
The settlement is equally beneficial to the plaintiffs who took a risk by filing the lawsuit. By agreeing to the settlement, the plaintiffs receive some redress for their claims without a lengthy and expensive court battle, which may or may not end in their favor.
Anyone who worked as an Operations Supervisor for Genco Distribution Systems between August 10, 2007 and April 24, 2014 can file a claim for damages and penalties under the lawsuit.
The attorneys at Chicago Overtime Law Center have decades of experience litigating wage and hour cases, including overtime, vacation pay, meal breaks, and tips. We have offices conveniently located in Oakbrook Terrace and Chicago, Illinois. Contact a Schaumburg and Evanston wage and hour lawyer at the Chicago Overtime Law Center today at 312-869-4095. We are looking to represent service worker, and loan and mortgage brokers who have not been paid overtime and have been misclassified as managers.