Last month a federal district court in Florida permitted a wage and hour collective action to proceed on behalf of managers and assistant managers at Starbucks stores across the nation. Many thousands of employees may be permitted to opt in to this massive claim for improper exempt classifications and corresponding unpaid overtime.
Despite the publicity attached to the revisions of the overtime exemptions rules last August, this case illustrates the dangers of neglecting the exemption requirements of the Fair Labor Standards Act (FLSA) and the wage and hour regulations of the DOL.
In the first eight months of 2004, there were over 780 collective actions filed in federal courts alleging improper pay practices under the FLSA. That represents a hundred-fold increase over the filings for the entire year of 1994. Clearly, wage and hour collective actions continue to be a major growth industry for plaintiff-oriented law firms operating in close cooperation with each other in litigating against businesses that are less than vigilant in maintaining compliance with the FLSA.
For example, the plaintiff class in the Starbucks case consists of managers and assistant managers who claim that their duties are indistinguishable from those of non-exempt employees in the stores. The plaintiffs claim that they make as many lattes and sweep as many floors as do the baristas who are entitled to overtime as non-exempt workers.
Employers who have not taken the time recently to review and audit their pay practices are at significant risk from even unintended illegal payment practices under the FLSA.
Therefore, employers should insure they have: