In 2019, the U.S. Department of Labor’s Wage and Hour Division (WHD) held an investigation into Planet Vapor Inc. (Vapor), a retailer, for violating the Fair Labor Standards Act (FLSA). The WHD found that some store managers were being paid a flat weekly wage that did not match the minimum wage of $7.25 in South Carolina. Vapor had also wrongly classified employees as exempt from overtime pay, even though they didn’t meet the criteria for exemption.
As a result, the employees were not compensated for any extra hours they had worked that exceeded 40 hours per week. Additionally, Vapor failed to include commissions in other employees’ regular pay rates when calculating overtime, which led to lower overtime pay than required by the FLSA. Lastly, Vapor had also failed to maintain their employees’ time and payroll records.
By the end of the lawsuit, Vapor had agreed to a settlement amount of $66,410 in back wages and liquidated damages. This amount was paid to 20 employees who were affected by Vapor’s violations.
Key lessons from this case:
- Pay calculations should consider all hours worked and any additional compensation components, such as commissions or bonuses.
- Employers should accurately classify employees as exempt or non-exempt from overtime requirements based on the criteria outlined in the FLSA.
- If employees have issues with overtime and misclassification at their work, they can contact the Department of Labor to investigate.
If you want to know more about overtime regulations, read our guide on South Carolina Overtime Laws.
