The most recent wage and hour class action lawsuit (there have been many) was filed by Lowe’s employees in California federal court. Eight current and former employees claim the nation’s second largest hardware chain violated federal and state wage and hour laws by failing to pay accurate wages and uninterrupted breaks. The class action states that “[Lowe’s] wilfully refused to pay plaintiffs and members of the class and collective the required compensation for all hours worked and failed to keep time records as required by law.”
According to court documents, Lowe’s violated the California labor code by failing to:
- Provide rest and meal breaks
- Pay overtime wages
- Maintain accurate records for hours worked
- Pay wages when due
- Provide accurate wage statements
- Reimburse work-related expenses
- Pay all wages due upon an employee’s termination.
A recent paper (January 2023) published in the National Bureau of Economic Research found “widespread evidence of firms appearing to avoid paying overtime wages by exploiting a federal law that allows them to do so for employees termed as “managers” and paid a salary above a pre-defined dollar threshold.” Translated by the NYT: Many companies provide salaries just above the federal cutoff to frontline workers and mislabel them as managers to deny them overtime.
The researchers found:
- More overtime unpaid when firms have stronger bargaining power and employees have weaker rights.
- Overtime more comonon for firms with financial constraints and when there are weaker labor outside options in the region. Occupations in low-wage industries penalized more often for overtime violations. Our results suggest broad usage of Overtime avoidance using job titles across locations and over time.
- Wages avoided are substantial - firms avoid roughly 13.5% in overtime expenses for each strategic “manager” hired
Federal law requires employers to pay time-and-a-half overtime to hourly workers after 40 hours, and to most salaried workers whose salary is below about $35,500 a year. Companies need not pay overtime to salaried employees who make above that amount if they really are managers. A recent New York Times article reveals that many employers—and many of them retailers-- are mislabeling rank-and-file workers as managers to avoid paying them overtime.
READ MORE CALIFORNIA LABOR LAW LEGAL NEWS
According to the complaint, Lowe’s required some managers to do the following, without compensation:
- read and respond to their work email from their smart phones during non-work hours
- come to work early to perform a “sweep” of the store property in their car
- arm and disarm the alarm system
In May 2022 Lowe’s settled its managers’ unpaid wages lawsuit for $7.45 million. Nearly 2,400 hourly managers claimed they were denied pay for certain off-the-clock work. The settlement resolved a multi-district litigation that included one federal case filed under the Fair Labor Standards Act and 18 state law wage and hour actions.