PHILADELPHIA — RadioShack Corp. will be paying $700,000 to a group of its employees, according to a recently reached settlement agreement in a class action overtime pay lawsuit. Salaried employees at Pennsylvania RadioShack locations claimed the company denied them earned overtime wages. The employees claimed the company continued to use a compensation system even after it was found to violate the state’s minimum wage laws.
RadioShack Claim To Settlement
In April 2013, David Verderame, a former store manager, filed his initial lawsuit against the electronics retailer. Verderame alleged in his complaint that RadioShack’s fluctuating workweek resulted in salaried employees being denied proper overtime wages. He claims the salaried employees were not paid the required one and a half times their regular rate when overtime was calculated. The fluctuating workweek method allegedly improperly calculated the employees’ regular hourly rate used in calculating overtime. The method divided an employee’s weekly salary by the total number of hours worked in the week and paid overtime at half of that rate.
In October 2013, RadioShack sought summary judgment claiming the method was legal and that the employees received the full overtime amount. At the same time, Verderame requested partial summary judgment in which he requested the court hold that the fluctuating workweek method violated the state’s minimum wage laws. In July, the court found that the method may not violate federal laws, but did violate the state’s laws. Finally, in November 2014, after a day of negotiations, the parties reached the current settlement.
Under the terms of the settlement, all employees working for RadioShack in Pennsylvania who received overtime calculated with the fluctuating workweek method since April 2010 will be included. The included employees will share in $513,000 of the $700,000 settlement amount. The remaining amount will go towards court costs and attorneys’ fees.
Salaried Employees and Overtime
Under state and federal wage laws, many salaried employees are still entitled to overtime pay when they work more than 40 hours a week. The overtime they receive must be at least one and a half times their regular rate of pay. Because salaried employees do not receive an hourly rate, the employees’ regular rate of pay must be calculated before overtime can be determined. Under federal law, the fluctuating workweek method, as described, is legal and results in an employee’s regular rate fluctuating each week based on how many hours were worked. However, as the RadioShack case illustrates, this same method may not be legal under the various state laws.
If you receive a salaried wage and overtime, but you believe your employer has improperly calculated or failed to pay your earned overtime wages, contact our team of overtime pay lawyers to discuss your options today at (855) 754-2795. Or our experienced legal team can evaluate your situation when you complete the Free Unpaid Overtime Case Review form. If we accept your case, we will represent you under our No Fee Promise. This means there are no legal fees or costs unless you receive a settlement.