In April, I wrote a post about inside sales workers and how their overtime pay is calculated. One of the companies who is being sued is GNC. The lawsuit alleges that they pay their inside sales workers ½ overtime instead of time and a half. GNC claims that they are entitled to pay overtime the way they do because of a federal regulation. GNC has filed a motion to dismiss this lawsuit. It is pending federal court in Springfield, Massachusetts. The judge has set a hearing on November 12, 2014 to hear argument on GNC’s motion to dismiss and the plaintiff’s motion for conditional certification of the class under federal law. The address is 300 State Street, Springfield in the Hampden Courtroom.
This case presents a very interesting issue under Federal, Massachusetts and other states’ overtime laws. Many employers try to save as much money as possible on payroll and try to use the half time overtime method wherever they think they can. It is only permissible in rare instances, however, and many employers use it when they should not. Some employees have referred to this method of overtime pay as “Chinese Overtime” (although I don’t believe it is acceptable in China).
I believe that non-exempt workers should be paid an hourly rate and one and a half times that rate when they work over 40 hours. There are some circumstances, such as piece work, where the straight time pay is already built into the pay when they work over 40 hours. Commissions are different. They are earned through increased sales, not increased hours. Furthermore, some laws hold that the weekly salary should be divided by the number of hours in the usual work week. That is the way that Connecticut law reads. So, if the usual work week is 40, then the salary should be divided by 40 to come up with an hourly rate.
In any event, it should be an interesting day in Springfield when the court hearings argument on this important case. I’ll be there listening and I’ll report what happens in another blog post.