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Bed Bath and Beyond Settles Employment Law Class Action

The federal Fair Labor Standards Act (FLSA) is pretty clear on the definition of overtime and what employers are required to provide for their workers who spend more than eight hours a day or forty hours a week working. All hourly, nonexempt employees are entitled to one and one-half times their normal hourly rate for all overtime worked.

But according to a recent wage and hour class action lawsuit against Bed Bath & Beyond (BBB), the retail chain allegedly miscalculated the overtime wages earned by its managers and customer service representatives in several of its New Jersey locations. In doing so, BBB allegedly violated both the FLSA and New Jersey Wage and Hour Law.

The named plaintiffs were each paid an annual salary ranging from $63,000 to $70,000. Rather than figure an hourly rate based on their annual salary, BBB allegedly took its employee’s weekly base salary, divided it by the number of hours the employee worked that week, divided the solution in half, then multiplied that number by the number of hours the employee spent working after 40 that particular week. In addition to allegations that the formula violated the FLSA, the wage and hour complaint further alleges that it resulted in the class members receiving less than minimum wage for all the hours they spent working.

Certain employees can be held exempt from the FLSA’s overtime requirement, but only if they are paid a salary of at least $23,600 and meet very specific conditions. These qualifications include providing administrative assistance directly to an executive, spending more than half their time at work managing other employees (including weighing in on the hiring and firing of employees), or exercising a particular set of skills or level of education in the course of performing their jobs. Any employee who does not meet all the necessary requirements for one of the categories of overtime exemption is entitled to the premium overtime compensation for all the time they spend working after eight hours a day or forty hours a week.

The plaintiffs further allege they did not meet the requirements for overtime exempt status. Instead, even those who worked with the title of manager still spent most of their time at work performing many of the same mundane tasks as hourly, nonexempt employees. Some of these tasks include stocking merchandise, helping customers, and unloading freight. They allegedly had no say in the hiring and firing of other employees and did not spend most of their time at work managing other employees. The complaint further alleges that the lead plaintiffs regularly worked more than 40 hours per week, but that they were not properly compensated for that time.

In addition to compensation for their allegedly unpaid overtime, the proposed class action lawsuit is also seeking liquidated damages, statutory and declaratory relief, as well as attorneys’ fees and costs.

The first step will be for a court judge to determine if the claims of the various plaintiffs meet all the necessary requirements for status as a class action. If a judge certifies the class, then discovery can begin and the two sides can start preparing their arguments for court and/or negotiating a settlement.

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