Wage and Hour Division (WHD)

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TEMPLE, Texas -- McLane Co. Inc., headquartered in Temple, Texas, has agreed to pay $1,559,316 in overtime back wages to 570 current and former retail merchandising specialists nationwide after an investigation by the U.S. Department of Labor’s Wage and Hour Division found that the company had misclassified employees and did not pay overtime wages required by the Fair Labor Standards Act (FLSA).

“Workers are entitled to the wages they’ve earned,” said U.S. Secretary of Labor Elaine L. Chao. “We have secured more than $1.5 million in back wages for these workers, and the employer is on notice to properly compensate its employees in the future.”

McLane Co., a wholesale distributor of food and grocery products, erroneously regarded retail merchandising specialists as outside sales employees exempt from FLSA coverage. Additionally, the company did not keep required records of hours worked. This investigation was conducted by the Wage and Hour Division’s Dallas District Office following an initial investigation of the company’s Nicholasville, Ky., location by the division’s district office in Louisville, Ky. The employer cooperated with the investigation and has agreed to pay back wages in full.

The FLSA requires that covered employees be paid at least the federal minimum wage of $5.85 an hour for all hours worked, plus time and one-half their regular rates of pay for hours worked over 40 per week, unless otherwise exempt. The minimum wage will increase to $6.55 per hour effective July 24, 2008, and to $7.25 per hour effective July 24, 2009. Under the law, employers also must maintain accurate time and payroll records.

To qualify for the outside sales employee exemption, an employee’s primary duty must be making sales (as defined in the FLSA), or obtaining orders or contracts for services or the use of facilities for which a consideration will be paid by the client or customer; and the employee must be customarily and regularly engaged away from the employer’s place or places of business.

The Wage and Hour Division concluded 30,467 compliance actions and recovered a record $220 million in back wages for more than 341,000 employees in fiscal year 2007. Back-wage collections in fiscal year 2007 represent a 67 percent increase over back wages collected in fiscal year 2001. The number of workers receiving back wages has increased by 58 percent since fiscal year 2001.

For more information about the FLSA and other federal wage laws, call the Department of Labor’s toll-free helpline at 866-4US-WAGE (487-9243) or the Wage and Hour Division’s district office in Dallas at 817-861-2150. Information also is available on the Internet at www.wagehour.dol.gov. Information about the FLSA’s current exemption for white collar executive, administrative, professional and outside sales employees can be found on the Internet at www.dol.gov/fairpay.

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U.S. Department of Labor releases are accessible on the Internet at www.dol.gov. The information in this news release will be made available in alternate format (large print, Braille, audio tape or disc) from the COAST office upon request. Please specify which news release when placing your request at (202) 693-7828 or TTY (202) 693-7755. The Labor Department is committed to providing America’s employers and employees with easy access to understandable information on how to comply with its laws and regulations. For more information, please visit www.dol.gov/compliance.