And you thought time-and-a-half was expensive! Check out how much these employers had to shell out for their overtime missteps.
No denying overtime is a significant expense for many companies. But it’s nothing compared to the price tag for companies that step outside the line in their OT practices.
Check out five huge settlements in recent history – and what companies of all sizes can learn from these companies’ mistakes:
1. EA Games: $14.9 million
Game over! Guess what landed this company on the hook for its overtime missteps? An employee blog, which raised the issue of unfair pay practices — and got co-workers thinking the same. The result: a nearly $15 million settlement to programmers who worked for the company during a five-year period.
2. Pacific Gas & Electric Co.: $17.25 million
Consistency’s the key here – and that’s what this utility learned the hard way. Though employees worked side by side doing the same jobs for the same hours, some earned overtime; while others didn’t. The only difference? Their job titles. The cost of this lesson? $17.25 million to “Senior New Business Representatives.”
3. Cintas: $22.75 million
Classifying workers can be a tricky prospect. When this uniform company determined its drivers were exempt from overtime, a court ruled they missed the mark. The hundreds of delivery drivers who didn’t earn their time-and-a-half? They received nearly $23 million in a class action suit.
4. Computer Services Corp.: $24 million
Sometimes, an entire industry gets the spotlight shined on it because of classification issues. That’s what led to this company having to pay eight figures to 40% of its workforce. Other companies in its industry had come under fire for denying tech workers overtime. That got CSC’s own employees wondering whether they, too, were entitled to more than they were receiving.
5. Tenet Healthcare Corp.: $85 million
Here’s reason to pay careful attention to new federal and state laws governing overtime. Back in 2000, California law changed, meaning that employees working 12-hour shifts were then entitled to overtime. When one employee’s pay stayed the same (the company lowered his hourly rate), he sued. A staggering 23,000 other employees got in on the action, and the company had to pony up one of the biggest OT settlements ever.