Dive Brief:
- Burlington Coat Factory has agreed to pay nearly $20 million to settle two lawsuits brought by assistant store managers who claimed they were deprived of overtime pay when they worked more than 40 hours in a workweek because they were misclassified as exempt under state and federal wage and hour laws (Goodman v. Burlington Coat Factory Warehouse Corp., et al. and Kawa et al. v. Burlington Stores, Inc. Nos. 1:11-cv-04395 and 1:14-cv-2787 (D.N.J., July 28, 2020)).
- The settlement represents an average gross amount of $12,003 for those involved and is an "excellent result" for a misclassification action, the attorneys for the plaintiffs said in a court document.
- A New Jersey federal trial judge has been asked to grant preliminary approval of the settlement.
Dive Insight:
Retailers that classify assistant store managers as exempt from the FLSA's overtime pay requirements have faced challenges on this issue. Just days ago, the parent companies of T.J. Maxx, Marshalls and HomeGoods agreed to pay $31.5 million to settle class action claims alleging they were improperly classified as exempt and denied overtime pay.
To determine whether workers are exempt from the FLSA’s requirement that employees must be paid time-and-one-half for hours worked beyond 40 in a workweek, employers must consider salaries and job duties, sources previously told HR Dive.
The salary basis test requires that employees make more than $684 per week, with some exceptions. Once the salary threshold has been met, the employee's job duties are considered with respect to exemptions like those for executive, administrative, professional and outside sales employees. The assistant managers in Goodman alleged they were tasked with stocking shelves, building displays and other similar duties.
Retail employers should note that the U.S. Department of Labor recently expanded the FLSA exemption for commissioned retail. The agency withdrew an earlier list of establishments unable to claim the exemption in favor of a "generally applicable analysis" that "is better suited to account for developments in industries over time regarding whether they are retail or not."
