- Thirsty Enterprise LLC, the operator of a Shell gas station and convenience store in Memphis, Tennessee, shorted workers on their overtime pay by giving them cash bonuses for the work based on a lower rate of pay than what the law requires, according to a March 28 announcement by the U.S. Department of Labor.
- Investigators for the DOL's Wage and Hour Division found that Thirsty paid store cashiers with checks that showed fewer hours than they actually worked. The DOL said the cashiers were asked to sign altered time records and were paid the balance of their hours in cash at straight-time rates, rather than the time-and-one-half rate required by the Fair Labor Standards Act for hours worked more than 40 hours per workweek. Investigators found that some of the cashiers had worked more than 80 hours a week. They also found that Thirsty failed to pay one employee the federal minimum wage. The worker was paid a fixed salary, the DOL said, but the salary amounted to less than the minimum wage for each hour worked.
- Thirsty's actions violated the FLSA's minimum wage, overtime and recordkeeping provisions, according to the DOL announcement. The agency recovered $30,005 in back wages and an equal amount in liquidated damages for four workers. Thirsty also paid $2,342 in civil penalties. Shell did not respond to a request for a comment before press time.
When it comes to overtime pay, there are three common red flags: 1) paying "nonexempt" employees (employees who aren't exempt from the FLSA's overtime pay requirements) "straight-time," or their regular hourly rate, for their overtime work, instead of at the required time-and-one-half rate; 2) altering pay or timekeeping records to indicate employees worked fewer hours than they actually did to avoid complying with the overtime requirements; and 3) persuading or forcing nonexempt employees to agree to give up their right to overtime pay.
In Fact Sheet #23, the Wage and Hour Division explains: "Unless specifically exempted, employees covered by the Act must receive overtime pay for hours worked in excess of 40 in a workweek at a rate not less than time-and-one-half their regular rates of pay." Earnings may also be determined on a piece-rate, salary, commission or some other basis, the fact sheet adds. In such cases, overtime pay must be computed on the basis of the employee's average hourly rate derived from such earnings. To get the average hourly rate, the fact sheet says to divide the total pay for employment (except for statutory exclusions) in any workweek by the total number of hours worked.
Another point: The regular rate of pay can't be less than the minimum wage. The federal minimum is $7.25 per hour. Employers must also comply with state minimum wage laws, which means they have to pay employees according to which standard is higher. All states except five (Alabama, Louisiana, Mississippi, South Carolina and Tennessee) have a minimum wage law.
Fact Sheet #23 cautions that overtime pay can't be waived — not even by agreement. For example, an agreement that the employer will count only eight hours a day or only 40 hours a week as working time doesn't comply with the FLSA. Nor can an employer avoid the overtime requirements by giving an employee a fixed salary for a regular workweek longer than 40 hours.
With regard to recordkeeping, the WHD states outright in Fact Sheet #21 that the FLSA "requires the information to be accurate." Covered employees must maintain certain records for each nonexempt worker. Employers don't have to keep the records in any particular form, but they do have to include certain identifying information about each nonexempt employee.