Kohl's to pay $2.9M to settle assistant managers' overtime suit

Dive Brief:

A group of Kohl's assistant store managers have asked a court to sign off on a $2.9 million agreement to settle claims that the nationwide retailer failed to pay them overtime pay required by the Fair Labor Standards Act (FLSA) (Collins et al. v. Kohl's Dept. Stores, Inc. and Kohl's Corp., No. 2:18-cv-00962 (E.D. Wis., Jan. 20, 2021)).
The plaintiffs said Kohl's misclassified them as exempt employees, and, as a result, were not paid the overtime premium for hours worked in excess of 40 in a week. Kohl's denied the allegations.
Almost 900 assistant store managers submitted opt-in forms to join the lawsuit, according to the motion seeking approval. The company did not respond to a request for comment.

Dive Insight:

Overtime violations are a frequent topic of wage and hour litigation and they can generate expensive settlements. Assistant manager roles, in particular, have been the subject of much litigation.

Last year alone saw a number of multi-million-dollar settlements over such alleged misclassification. The parent companies of T.J. Maxx, Marshalls and HomeGoods agreed to pay $31.5 million to settle class action claims brought by assistant store managers alleging they were improperly classified as exempt and denied overtime pay. Burlington Coat Factory 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. And a Panera Bread operator agreed to pay $4.6 million to settle a class action lawsuit alleging assistant managers were improperly classified as exempt from overtime pay.

To determine whether workers are exempt from the FLSA's requirement that employees 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 FLSA's overtime exemptions, aside from the outside sales exemption, require employees to make more than $684 per week. Once the salary threshold is met, the employee's job duties also must be examined in accord with FLSA requirements. Depending on the exemption, the required job duties vary.

Retail employers also may want to note that the U.S. Department of Labor expanded the FLSA exemption for commissioned retail last year. The agency withdrew an earlier list of establishments unable to claim the exemption in favor of a generally applicable analysis "better suited to account for developments in industries over time regarding whether they are retail or not."