In addition to the federal minimum wage (which is currently still set at $7.25 per hour), each state, county, and city set their own minimum wages and employers are required to pay their workers no less than the highest minimum wage for their area. This remains true no matter how the employees are paid. Whether it’s hourly, by day, by project, on commission, or a salary, every worker is entitled to receive at least minimum wage for all the time they spend working.
According to a recent class action wage and hour lawsuit against Life Time Fitness Inc. in Illinois, fitness trainers were paid on commission and allegedly misclassified as exempt from overtime. If they earned less than 1.5 times the minimum wage through their commission, the difference was paid using something the gym called a “draw,” but that amount would be deducted from a later paycheck when the trainer made more than 1.5 times the minimum wage through their commission. These draws were also allegedly applied to their manager’s paycheck.
Instead of encouraging trainers to solicit more business, most managers chose to respond to this financial penalty by cutting corners with the hours of the trainers they supervised. Managers allegedly encouraged their trainers not to clock in until they were actively serving clients and to clock out as soon as they were done servicing clients. All the other tasks trainers were required to do, such as cleaning equipment, conducting fitness tests on prospective clients, and spending time on the gym floor to solicit new business, were allegedly done without pay. Trainers who failed to comply were allegedly fired as a result.
Because none of these tasks earned them a commission and their managers wanted them to perform them off the clock, the trainers allege they spent time working for Life Time Fitness that was either unpaid or underpaid.
In early 2016, the class of trainers was initially denied class certification by U.S. District Judge Sharon J. Coleman, who said the fact they were all paid by commission made their cases too individual to make a class action appropriate. A second class action wage and hour lawsuit was filed about a year later, in which the class was certified covering both the previous and the current classes of plaintiffs.
In October, the two parties reached two separate settlement agreements, which they have asked the court to certify. Under the terms of one agreement, $700,000 will go to pay the claims of 135 trainers who worked in the gym’s California locations. Under the terms of another agreement, $100,000 will go to pay the claims of 51 trainers who worked at Life Time Fitness locations outside of California, and about $140,000 will be used to cover the legal costs incurred by filing the class action lawsuits.
As part of the settlement agreements, Life Time Fitness gets to put the matter to bed without admitting to having done anything wrong. A statement from the fitness club’s counsel said that they continue to deny having done anything illegal and that they agreed to settle in order to avoid the costs and distraction that come along with pursuing legal disputes in the courts.The Chicago overtime lawyers at the Chicago Overtime Law Center are investigating unpaid overtime claims against large retail chains such as Petsmart, OfficeMax, Staples, Smart & Final, Apple, Walgreen’s, CVS, Urban Outfitters, GAP, Abercrombie & Fitch, Limited, Forever 21, Macy’s, Target, JC Penney’s, Lowes, Burlington Coat Factory, Marshalls, TJ Max, Victoria’s Secret, Nieman Marcus, Saks Fifth Avenue, Best Buy, Home Depot, Apple, Best Buy, Sears, K Mart, J.C Penney, Walmart, Costco, PetSmart, REI, Office Depot and other retail chains for misclassifying employees as managers, erasing or altering time sheets or time records, pressuring workers not to report or record overtime, failing to pay for time spent on security checks, and otherwise failing to pay workers for overtime and other wages. If you are the victim this practice call us at one of our offices near Northbrook, and Palatine at (312) 869-4095 or contact us online.