Rite Aid settles failure to pay overtime lawsuit.

Rite Aid has agreed to pay $20.9 million to settle 15 class action, overtime pay lawsuits. The drugstore chain faced liability from 6,000 current and former assistant and co-managers at their stores who claimed they were illegally classified as exempt from being paid overtime.

In the case, Quinones et. al. v. Rite Aid Corporation there were alleged violations of both New York and New Jersey labor laws in the payment of Rite Aid employees. The plaintiffs, both co-managers at Rite Aid stores, claim that the store classified them as “executives” in order to avoid liability for overtime pay under the state labor laws. This was even though the store knew or had reason to know that they were primarily engaged in stocking duties and other manual labor, had little to no supervisory functions, and wielded little to no discretion in their work. Under the New York Labor Law § 650 et seq., for an employee to be exempt from the overtime provisions of New York State Law, they must be in “a bona fide executive, administrative, or professional capacity,” among other exceptions.

According to the complaint, Rite Aid not only refused to pay time and a half for its workers, the company also refused to keep any records of their hours worked. This recent Rite Aid settlement certainly demonstrates that companies are worried about liability from this issue, and perhaps these suits will force these companies to more accurately classify their workers.

Even in these difficult economic times, employers must play fair and not attempt to mislabel and exploit their workers in order to cut costs. If you are in a similar situation and have not been receiving their due overtime pay, please contact the attorneys at the Harman Firm with you questions or concerns.