MetLife recently reached a settlement in a case where a group of its mortgage underwriters sued in Pennsylvania to recover unpaid overtime compensation. The $2 million settlement will resolve a dispute that began in October of 2010.
As noted elsewhere on this blog, the Fair Labor Standards Act (“FLSA”) requires that most–but not all–employees be paid at least the federal minimum wage for all hours worked, as well as one and one-half times their regular rate of pay for all overtime hours worked (all hours worked over forty worked each week). In 2010, the US Department of Labor issued an interpretation stating that the FLSA does apply to mortgage loan officers or other employees who perform similar functions. Subsequently, in August of 2010, MetLife adopted the DOL’s interpretation and began paying its underwriters one and one-half times their regular rate of pay for their overtime hours. However, two of the underwriters sued MetLife for refusing to properly compensate the overtime hours they had worked before August of 2010. Thirty-five underwriters attempted to join the suit, but both parties asked the judge to postpone class action certification while they mediated their dispute. Through mediation, the current settlement was reached.
The $2 million figure will be divided among approximately 316 individuals, with each individual employee receiving about $6,300 in compensation. If the settlement is approved, it will serve as another example of employees successfully vindicating their legal rights using a collective action FLSA lawsuit to force a settlement.
More importantly, this case illustrates how an employer can do the right thing by re-classifying an employee as non-exempt from overtime, but still violate the law. Sometimes, an employer will realize that it is unlawfully treating an employee or group of employees as exempt from overtime pay. The employer can fix that problem, going forward, by simply “re-classifying” the employee as non-exempt, so that the employee from then on receives one and a half times their regular rate for overtime hours. However, the FLSA violation is not completely rectified until the employee receives an appropriate amount of wages going back at least two years, or three years if the violation is willful, and many employers are hesitant to pay such back wages due to the cost involved. And many times, the employer thinks it will just take its chances and hope that the employee does not assert his or her rights to back wages. Likewise, in addition to back wages, the FLSA entitles an employee to liquidated damages (which is an additional amount equal to the unpaid wages), as well as attorneys’ fees and costs. Finally, if an employer asks an employee to sign a release/waiver of their FLSA claim in exchange for payment of unpaid back wages, most courts have held that such a waiver/release is not legally valid in absence of a formal approval by the Department of Labor or a Judge in a court of law.
If your employer has recently re-classified you as being entitled to overtime, but has not paid you your back wages, your legal rights have probably been violated. In that event, you should contact a St. Louis overtime lawyer.