Settlement Reached in JC Penney Overtime Suit

Settlement Reached in JC Penney Overtime Suit

LOS ANGELES — Alejandro Ruiz, who was an employee of JCP Logistics Inc., a J.C. Penney Co. Inc. subsidiary, has agreed to settle his class action overtime suit alleging violations of wage provisions of California labor laws. The settlement agreement would total $900,000, $300,000 of which would be paid out for attorneys’ fees and $30,000 in costs. A $10,000 service award would be paid to Ruiz for being the representative plaintiff, and $26,000 would be paid for administrative and state fees. The remaining $534,000 would be paid on a prorated basis to the approximately 732 members of the class who worked with JCP Logistics in California from October 2009 to the present. This would average to about $730 per person.

Incorrect Overtime Calculation

Ruiz alleged in his suit that the company used the wrong formula under California law when it calculated overtime wages owed to employees as part of bonuses it paid out during the period. Ruiz alleged that, because of this miscalculation, the company owed employees approximately $2 million in unpaid overtime. Additionally, Ruiz alleged that JCP failed to properly compensate employees for time they spent waiting in security lines upon arriving and leaving work. Ruiz also claimed that JCP failed to pay all wages at the time of discharge and issued incomplete wage statements.

Calculating Overtime in California

The formula for overtime in California is normally one and one-half times the employee’s regular rate of pay for all hours worked that is more than eight hours up and including twelve hours in any workday, and for the first eight hours worked in the consecutive day of work in a workweek. If an employee works more than twelve hours in any workday and more than eight hours on the seventh consecutive day of work in a workweek, the overtime rate of pay is double the employee’s regular rate of pay.

As laid out in the California labor code, the overtime calculation is based on the regular rate of pay, which is the compensation an employee normally earns for work he or she performs. Normally, the regular rate of pay must be based on the number of hours an employee works which may not exceed the legal maximum of eight hours per workday or forty hours per workweek. However, in instances where the workweek is less than forty hours, the California labor code does not require payment of the overtime premium unless the employee works more than eight hours in a workday or more than forty hours in a workweek.

For those who are paid on a salary basis, the regular rate of pay is determined by first multiplying the monthly salary by twelve months to get the annual salary. Then the annual salary is divided by 52 weeks to get the weekly salary. Finally, the weekly salary must be divided by the number of legal maximum regular hours — forty — to get the regular hourly rate. For those who are paid by the piece or commission, the regular rate of pay may be calculated by using the piece or commission rate as the regular rate and the employee is paid one and one-half times this production rate during the first four overtime hours in a workday, and double time for all hours worked beyond twelve in a workday.

Employers must apply the proper formula to calculate overtime pay or otherwise they may be held liable for illegally withholding wages. If you believe that you have been deprived of your duly-earned pay, you should call  (855) 754-2795 or complete the Free Unpaid Overtime Case Review form on the top right of this page. Our wage lawyers will evaluate your situation and help you obtain the compensation that you are entitled to. Call our experienced attorneys today.

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