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Nordstrom Settles Class Action Where it was Accused of Allegedly Failing to Pay Minimum Wage and Overtime to Certain Commissioned Sales People


According to the federal Fair Labor Standards Act (FLSA), all employers conducting business in the United States are required to pay their workers at least $7.25 per hour. Not all employees are paid by the hour, though. Some of them are paid per shift, per piece, or on commission. However, no matter how they are paid, their total hours worked and wages paid must equal out to at least the federal minimum wage of $7.25 per hour.

According to a recent class action wage and hour lawsuit against Nordstrom Inc., the department store allegedly failed to pay its commissioned sales employees the minimum wage as required by law, or the proper overtime compensation when appropriate. Under the FLSA, employers are required to pay one and one-half times an employee’s normal hourly rate for all of the time that the employee spends working after eight hours a day or forty hours in a week. There are some exceptions to this rule, but the Act is very specific about the types of employees that qualify for overtime exemption. Merely labeling an employee as overtime exempt is not sufficient. The law provides specific duties and responsibilities which must be part of a worker’s job in order for that worker to qualify for overtime exemption.

There are three main categories of employees who can be considered exempt from overtime compensation according to the FLSA. The first category consists of administrators. These are employees who perform primarily office work and provide administrative support directly to an executive. The second category is executive and is made up of higher-level employees whose main responsibilities involve managing employees below them. In order to fit into this category, an employee must have the authority to discipline employees and must have significant input into the hiring and firing of employees. Finally, there is the professional category, which covers employees who must have a higher level of education or a specific set of skills in order to perform their jobs. This category includes workers such as doctors, lawyers, and artists.

While outside sales people can sometimes qualify as exempt from overtime, the law does not allow employers to deny overtime to their commissioned sales employees.

The class action lawsuit originated as two separate lawsuits, which were later combined. The lawsuits were filed by four current and former commissioned sales employees of Nordstrom, all of whom worked for the company in California. The plaintiffs allege that Nordstrom violated California labor laws by failing to pay them (and other commissioned sales employees) minimum wage, unless they met the expected minimum commission for that pay period. The result was that these workers were allegedly not paid for time spent performing work before, during, and after their scheduled shifts. The plaintiffs therefore claim unpaid wages for both straight time and overtime.

Nordstrom, while denying any wrongdoing, has agreed to settle the lawsuit for $7.65 million, $5.3 million of which will be made immediately available to all of the potential class members. The settlement still has to be approved by a judge, but assuming that goes through, class members can expect to see their check in the mail soon afterwards.

The Chicago overtime lawyers at the Chicago Overtime Law Center are investigating unpaid overtime claims against large retail chains such as Walgreen’s, CVS, Urban Outfitters, GAP, Abercrombie & Fitch, Limited, Forever 21, Macy’s, Target, JC Penney’s, Lowes, Best Buy, Home Depot, Apple, Best Buy, Sears, K Mart, J.C Penney, Walmart 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 (312) 869-4095 or contact us online.