A local company will pay thousands in unpaid overtime wages after the U.S. Department of Labor found it misclassified certain employees as exempt from overtime pay.
The U.S. Department of Labor’s Wage and Hour Division said that Best Aire Compressor Services Inc. in Grand Rapids, which does business as Best Aire CSI, misclassified salaried parts managers and some office clerical staff as exempt from overtime pay.
Best Aire did not return a request for comment prior to publication.
Under terms of a consent judgment, the air compressor sales company has agreed to pay more than $13,600, including $6,801 in back wages and an additional $6,801 in liquidated damages, to 13 former and current employees.
Five of the employees work in the Grand Rapids office, six in the company’s Millbury, Ohio office and two in its Greenfield, Indiana office.
The company is also required to provide information on the Fair Labor and Standards Act, or FLSA, and specific Wage and Hour Division fact sheets on rules governing overtime to employees.
The DOL said Best Aire and its owner, Thomas Russell, failed to pay the employees and, on some occasions, hourly service technicians overtime for hours worked beyond 40 in a workweek, in violation of the FLSA.
The employer also failed to maintain accurate pay records, the DOL said.
The FLSA provides an exemption from both minimum wage and overtime pay requirements for individuals employed in bona fide executive, administrative, professional and outside sales positions, as well as certain computer employees.
To qualify for exemption, employees generally must meet certain criteria regarding their job duties and be paid a salary that isn't less than $455 per week.
The DOL said job titles do not determine exempt status. For an exemption to apply, an employee's specific job duties and salary must meet all the requirements of the department's regulations.
The DOL said the FLSA requires that covered non-exempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week.
Employers also must maintain accurate time and payroll records.
The FLSA provides that employers that violate the law are liable to employees for their back wages and an equal amount in liquidated damages.
“Simply paying an employee a salary does not necessarily mean the employee is not entitled to overtime,” said Mary O’Rourke, district director of the DOL Wage and Hour Division in Grand Rapids.
O’Rourke said when employees are shorted overtime pay, it not only hurts that person and their family, it also hurts competitors by creating a competitive disadvantage.
“We remain committed to ensuring that workers take home every penny they have earned rightfully and to leveling the playing field for employers who play by the rules,” O’Rourke said.