Rite Aid has agreed to pay $20.9 million to settle 14 lawsuits that accused the drug store chain of violating state and federal wage laws. A federal judge has approved the $20.9 million settlement, thus ending the lawsuits that alleged some salaried assistant and co-store managers were wrongly classified to avoid paying them overtime. The settlement encompasses back pay, damages and attorney fees for cases filed in federal and state courts.
Under the Fair Labor Standards Act, certain salaried managerial employees in “executive, administrative or professional” roles may be exempt from overtime, but lower-level employees are entitled to increased compensation for more than 40 hours worked per week. The “executive exemption” under the FLSA allows companies to pay managers a set salary and avoid paying them overtime in the event a manager works more than forty hours. However, the exemption also mandates that managers must actually do management duties as their primary duty as opposed to the same tasks as hourly workers.
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