Urban Outfitters Agrees to Pay $5M in Back Overtime to Employees
Employers need to be very careful with how they pay their employees because overtime lawsuits continue to be one of the hottest trends in employment litigation, and they can be very expensive.
In November 2015, Urban Outfitters agreed to pay $5 million to current and former employees who were not paid overtime. The payments include back wages and penalties, which can be steep in this type of litigation.
Allegations Against Urban Outfitters
Like many retailers, Urban Outfitters required its employees to submit to a baggage check for merchandise that the employees might be trying to take home illegally. The employees alleged that they were required to undergo these bag checks after their shifts were over and after they had clocked out.
The Law
Under the FLSA, employers are required to pay their employees a minimum wage for all time worked and an overtime rate for all hours over 40 worked in any week. Since these bag checks are required by the employer, Courts consider this to be work time, and therefore, the employees must be paid for all of the time spent having their bags checked and waiting. Even though this time seems insignificant, it adds up quickly, day after day, to a significant loss of wages on the part of the employees. Employees may seek up to three years of back pay at the overtime rate plus punitive damages and attorney’s fees for violations.
The Settlement
Urban Outfitters agreed to pay over $5 million to its employees.
Employment Takeaway
If you are an employer who requires activities be performed either before or after an employee’s shift, you may need to count that as work time and pay the employee for that time. If you are an employer who has questions about whether certain activities are considered work time, or if you are an employee who has worked without being paid, you should contact an attorney right away.
