The Associated Press reported on Friday that Federal officials say more than 700 Arby’s workers in five states are to receive nearly $57,000 in back wages.
The U.S. Labor Department announced Tuesday that Tulsa, Okla.-based United States Beef Corp. (d/b/a Arby’s) has agreed to make the payment to 759 current and former Arby’s workers.The affected restaurants are in Arkansas, Illinois, Kansas, Missouri and Oklahoma.
The Labor Department says bonuses paid to managers at 255 Arby’s restaurants didn’t include overtime when the bonuses were calculated. The agency says the law requires that time-and-a-half pay be included in commissions, bonuses and incentive pay for hours worked beyond 40 hours in a week.
Under the Fair Labor Standards Act (“FLSA”), overtime for hourly workers “must be compensated at a rate not less than one and one half times the regular rate at which the employee is actually employed.” The “regular rate” is computed by dividing the total compensation paid to an employee (including all commissions, bonuses and incentive pay) by the hours worked in a given week. Unlike an hourly rate, the “regular rate” of pay will vary from week to week depending on the number of hours worked and the monetary amount of any bonus or commission paid to the employee.
The DOL found that Arby’s had computed overtime for the hourly managers using their hourly rate of pay rather than their “regular rate.” The DOL stated in a press release that “Fast food restaurants are frequently found by the Wage and Hour Division to be in violation of the FLSA’s minimum wage and overtime wage provisions.”
Employers in all field need to make sure to correctly calculate overtime. This is especially true for businesses that pay employees lump sum amounts, such as bonuses, pursuant to company policy or practice. Otherwise a relatively small deviation from the required computation can lead to significant liability.
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