woman receiving payroll

Retail workers often run into a host of wage and hour issues with their employers, ranging from unpaid overtime to illegal paycheck deductions. If you’re a retail worker you may be facing some of these in your job. Or you may have questions about whether your employer is violating your rights under the Fair Labor Standards Act (FLSA) or state wage and hour laws. Our national network of attorneys is here to ensure you are paid and treated fairly in your job.

What Rights Do Retail Workers Have?

The FLSA is the primary federal law that protects hourly workers throughout the United States. For most retail workers, employers must follow the FLSA as well as any applicable state laws or local ordinances that govern the issues described below. Importantly, wherever there is a discrepancy between the FLSA and a state or local rule, the one most favorable to the worker will prevail.

If you are a retail worker, you have the following rights:

  • Minimum wage. Non-exempt retail workers who are covered by the FLSA (which is most retail workers in the country) have the right to be paid a minimum wage of either $7.25/hour or a higher rate set by the states. Many but not all states exceed the federal minimum wage, but the worker must be paid the higher rate.
  • Overtime pay. Most retail workers are entitled to be paid overtime for all hours worked over 40 during a work week. Overtime is sometimes called time and a half because it must be at least 1.5 times the worker’s regular hourly rate. Some retail workers are exempt if they are paid on a salary or commission basis, but this alone doesn’t necessarily mean the employee isn’t entitled to overtime (see below).

Common Problems That Retail Workers Face

In light of the above retail employee rights, these are some typical issues these workers deal with:

Failure to pay minimum wage and overtime. This is a broad problem that applies to both retail and non-retail workers in many industries. It’s important to always check your pay stubs or pay statements to ensure that you are being paid at least a minimum wage. As for overtime, make sure your employer is correctly totaling the number of hours worked and paying you time and a half for all hours in excess of 40 in each week. Some specific issues that retail workers often see include:

  • The employer has made an error in the total number of hours worked or the regular or overtime rate of pay
  • The employer illegally tries to average hours across more than one week (overtime must be paid for all hours over 40 in a single work week, so each week stands on its own)
  • The employer deducts time for meal or rest breaks that were not actually taken
  • The employer does not include all compensation (eg. shift differentials and bonuses) when calculating the overtime pay rate
  • The employer offers something other than wages, such as time off, for regular or overtime hours (known as “comp time”)

Not paying for all hours worked. Some employers try to cheat retail employees by having them do “off the clock” work such as opening or closing the store without pay. Employers must record and pay for all hours worked by their employees. Once the employee reports to work at their scheduled time, the clock starts running until the employee is relieved of all job duties. The employer also cannot automatically deduct for meal or break times if the employee is required to work or be “on call” during those times.

A specific example of this problem is known as “engaged to wait” time. This is where a retail worker reports for work but is essentially told to wait until he or she is needed. If the employee is told this but is not given a time to report back to work (which must be long enough for the employee to use for his or her own benefit), then the employer must pay for this wait time.

Illegal paycheck deductions. Workers are permitted or required by law to make certain deductions from worker paychecks. But not all deductions are legal. Some potential examples are deductions for:

  • Cash or merchandise shortages
  • Required uniforms
  • Tools of the trade

These deductions are not legal to the extent they reduce the employee’s wages below the statutory minimum wage or reduce the amount of the employee’s overtime pay. Again, state and local rules may vary, so check with an attorney if you suspect your employer is illegally taking money from your paycheck.

Improper application of an exemption. Not all employees in the United States are subject to the FLSA’s minimum wage and overtime rules, or those of state and local governments. Two common exemptions that sometimes apply to retail workers are the commission and salary exemptions.

As mentioned above, merely paying a commission does not necessarily exclude someone from overtime. To be exempt as a commission worker, the following must apply:

  • The employee must work for a retail or service establishment
  • The employee’s regular rate of pay must exceed 1.5 times the federal minimum wage (currently $7.25) for every hour worked in a workweek in which overtime hours are worked
  • More than half of the employee’s total compensation during a representative period (which is set by the employer but which cannot exceed one year) must come from commissions

Salaried workers are not necessarily exempt either. Whether the exemption applies depends upon not just the payment of a salary but also the worker’s specific job duties and responsibilities. The FLSA contains various exemptions for salaried workers with executive, administrative, and professional job duties, most of which will not usually apply to a retail worker.

Exemptions are strictly defined and rigidly enforced. Ultimately, it is up to the employer to justify the use of one to avoid paying overtime or minimum wage to a retail employee. If your retail employer has categorized you as exempt, it’s a good idea to speak with a knowledgeable wage and hour attorney.

If You’re A Retail Worker, Let Us Advise You

The bottom line is that most retail workers must be paid a minimum wage and overtime, and will enjoy the other protections afforded by the FLSA and state and local laws. If you have questions about your pay, deductions from your paycheck, or other situations in which you are not being fully compensated for your work, it’s time to talk with The Lore Law Firm. Complete our free and confidential online client intake form today.