RadioShack lawsuit for overtime pay ends in $5.8 million payout

Keeping accurate time-keeping records for employees is an integral part of being a respectable business. When there is additional work to be done, employees may be required to work overtime in excess of their standard hours and given a higher rate of pay. Some Texas employers may try to find a way to avoid paying overtime pay, resulting in a violation of labor laws.

RadioShack Corp. is being accused by one of its former managers for being in violation of Pennsylvania labor laws. He alleged that the workers were being paid incorrectly for their overtime hours. This activity had reportedly been going on since April of 2010.

The chain fell in line with paying the employees according to federal standards, but they apparently did not abide by the Minimum Wage Act that is in place in Pennsylvania. According to this act, workers are to receive overtime pay of 1 1/2 times their regular rate of pay for overtime. The company instead used a fluctuating workweek, which paid some of the salaried employees for overtime at half of their standard rate.

A federal judge ruled that the Texas-based retailer owes at least $5.8 million for the overtime pay claims. RadioShack -- which is suffering heavily due to the declining need for their products -- may end up in default during 2014 because of this lawsuit. Employees who believe that they are being paid incorrectly for their overtime hours may choose to file a claim against their employer. If the case rules in favor of the workers, they may receive the back wages to which they are entitled.

Source: Bloomberg, "RadioShack Found Liable in Pennsylvania Overtime Lawsuit", Sophia Pearson, July 10, 2014

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