One franchise owner of the national donut chain Dunkin Donuts is facing a $197,787 settlement for wage and hour violations it allegedly committed in 55 franchises throughout New York and New Jersey. The owner of the particular franchises is known as QSR Management, of Edison. The company did not pay the managers overtime because they collected a salary. However, the Fair Labor Standards Act requires that the any worker who earns a salary be paid at least $455 per week. However, the manager did not earn a guaranteed salary of $455 for all work weeks, and in some cases their pay was reduced when they worked less than 60 hours a week.

The Fair Labor Standards Act and Exempt Workers

Both California and Federal law allow certain classes of employees to be exempt from overtime requirements. Under federal law an employee who falls into the executive, administrative, or professional exemptions do not need to be paid overtime. However, the employee must earn at least $455 per week and the specific job duties must match the statutory description. For example the professional exemption only applies to employees with advanced knowledge of a particular skill or trade or who possess creative artistry. The advanced knowledge may either be acquired thorough intellectual instruction or a combination of intellectual instruction and work experience. The administration exemption is for employees who exercise discretion in primarily non-manual officer work related to an employer’s business. The discretion must be on matters of significance.

California Pay Law

California standards are very similar to federal standards, however the salary tests are more stringent. In addition to getting paid at least $455 per week, the employer must pay the exempt employee a monthly salary that is at least twice the minimum wage for a 40 hour week, currently $8.00 per hour. This comes to $640 per week or $2773.33 per month. The fact that an employee only works part time does not change the amount that the employee must earn. The only deduction that an employer can make is when the employee misses time from work for personal reasons, or for illness and disability and the employer has a covered plan that deducts from their salary for absence for illness or disability. Courts have also required that the employer’s salary deducting plan be made in good faith and not simply to avoid overtime pay requirements.

If your employer has failed to pay your overtime you may be entitled to a lawsuit. To learn more contact the experienced California Employment Law attorneys of the Law Offices of Michael S. Cunningham, LLP. Schedule a free consultation by calling (951) 213-4786 today.