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AT&T Agrees to Settle Unpaid Overtime Lawsuit for $5 Million

The federal Fair Labor Standards Act (FLSA) mandates that all employees working within the United States must be paid no less than the federal minimum wage of $7.25 for all straight time worked. Any time an employee works more than eight hours a day or forty hours a week, the Act requires that the employee be paid one and one-half times her regular rate of pay. However, what determines an employee’s “regular rate of pay” can trip up some employers.

While most employees earning an hourly wage or yearly salary make the math simple and straightforward, not all employees are paid that way. Some are paid on a piece-rate basis, while others are paid on commission. To add to the confusion, some are paid a commission in addition to an hourly wage or salary. If an employee earns a commission during a pay period in which she also works overtime, then that commission must be included as part of her “regular rate of pay” in order to determine her overtime rate.

According to a recent class action wage and hour lawsuit against AT&T, the wireless phone company allegedly failed to do this when its retail sales consultants worked overtime, resulting in underpaid overtime. The lawsuit also alleges that AT&T failed to pay its employees for all of the straight time that they spent working and failed to provide timely and accurate wage statements.

The FLSA has very strict rules about providing employees with accurate wage statements in a timely manner. Since this is often the only record that employees have of the time that they worked and the wages they earned, the accuracy of these statements is of the utmost importance. An employer’s failure to provide accurate wage statements could be used by the plaintiff to prove that the labor violations were conducted willfully and intentionally, rather than as a result of neglect. In some courts, proof that the violations were intentional can result in a doubling of the fines, if the defendant is found to be guilty.

In addition to the federal FLSA, most states have their own labor laws that regulate employers working within the state. All employers working within the United States need to be sure to abide by all of the relevant state laws, in addition to the federal laws. California Labor Laws, for example, require employers to provide a worker with her final paycheck within 72 hours of her termination of employment. If the employee provides notice of her termination at least 72 hours prior to her termination, then the employer must provide her with her final paycheck at the time of termination. According to Prizer’s wage and hour lawsuit, AT&T also failed to provide employees with their final paychecks in a timely manner as required under California Labor Law.

In addition to the labor laws, the lawsuit also alleges that AT&T conducted unfair business practices and violated the California Private Attorney General Act.

AT&T recently agreed to settle the wage and hour lawsuit for $5 million. The settlement includes every employee that worked as a retail sales consultant in an AT&T store from October 19, 2010 to October 27, 2012. AT&T estimates that approximately 2,600 employees will participate in the settlement.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 Oak Brook and Chicago, Illinois. Contact the Elgin and Aurora unpaid overtime lawyers and attorneys at the Chicago Overtime Law Center today at 312-869-4095. We are looking to represent loan and mortgage brokers who have not been paid overtime and have been mis-classified as managers.