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ESA-WHD New Release: [12/03/1996]
Contact Name: Brad Mitchell
Phone Number: (312) 353-6976
Release Number: V-463
HARMON GLASS COMPANY PAYS $136,312 TO 677 EMPLOYEES FOR OVERTIME VIOLATIONS
Firm assessed civil money penalty of $135,400
Chicago — Harmon Glass Company, 4000 Olson Memorial Highway, Golden Valley, Minn., has been assessed a civil money penalty of $135,400 for alleged "repeat" overtime violations found by the U.S. Department of Labor.
The company has also paid $136,312 in back wages to 677 present and former employees. Back wages were paid to hourly and salaried employees who worked for the firm from March 1994 to March 1996. The investigation covered locations throughout the U.S.
The Labor Department's Wage and Hour Division issued the civil penalty for alleged "repeat" violations of the Fair Labor Standards Act (FLSA), the federal wage and hour law. Under the FLSA, civil money penalties are assessed where an employer has previously violated the minimum wage or overtime requirements. The firm has 15 days to request a review of the penalty by an administrative law judge.
"Civil money penalties encourage employers to comply with the law," stated Wage and Hour District Director Denise Scharlemann in Minneapolis.
The Labor Department's investigation found that the company misclassified some salaried managers as exempt employees. Under federal wage and hour law, managers must supervise the equivalent of two full-time employees to be exempt from overtime pay. The investigation found that some managers did not meet this test.
The investigation also found that hourly-paid employees, who received bonuses, were not paid proper overtime pay. The firm paid bonuses for good attendance, number of automobile windshields installed and gross sales. Harmon Glass Company paid employees time and one-half their regular hourly rate for hours worked over 40 in a week.
In general, bonus payments to employees who work over 40 hours in a week must be added with hourly and other earnings. The total straight-time earnings are then divided by total hours worked to establish the proper overtime rate. The bonus payment increases the average hourly pay for the week and amount of overtime pay due to the employee.
The Wage and Hour Division of the Labor Department's Employment Standards Administration enforces the FLSA. The law sets a federal minimum wage of $4.75 for most workers and generally requires overtime pay for hours worked over 40 in any workweek. The FLSA also requires employers to keep adequate time and payroll records.
The federal wage and hour law permits employers to pay workers a salary without additional overtime pay if certain tests are met. The duty tests are different for executive, administrative, and professional employees as defined by the regulations. The duties of executives must generally include management, supervision, authority to hire and fire employees, and the exercise of discretion.
Employers do not have to include certain discretionary bonuses and other types of payments in overtime calculations.
These include gifts on special occasions, contributions to welfare plans, and payments made under profit-sharing, thrift and saving plans.
The investigation was conducted by the Wage and Hour District Office, 220 South Second Street, Minneapolis, Minn., under the supervision of Denise Scharlemann, district director.
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