Mattress retailer to pay sales associates $40,000 in back wages
Larry Thomas -- Furniture Today, January 11, 2012
BATON ROUGE, La. — Bedding retailer Mattress Direct has agreed to pay more than $40,000 in back wages to 96 current and former sales associates following an investigation by the U.S. Department of Labor's Wage and Hour Division.
The Labor Department said the investigation found that the retailer violated portions of the Fair Labor Standards Act by failing to pay overtime and/or the federal minimum wage of $7.25 per hour to some of its salespeople.
Investigators found that commissions earned by sales consultants did not always yield the minimum wage. In addition, many employees received "straight time" wages for all hours worked, rather than 1½ times their pay rate for hours worked above 40 hours per week.
"Inside sales work is not exempted from the minimum and overtime wage requirements of the Fair Labor Standards Act," said Cynthia Watson, regional administrator for the Wage and Hour Division in the Southeast. "Employees were working up to 50 hours per week - some exceeding 120 hours in a pay period - but were not always paid at least the federal minimum wage or overtime when required."
The department said a total of $40,253 is being paid to the current and former employees. The retailer also agreed to comply with wage and hour laws in the future and install a new timekeeping system to accurately record work hours.
Lee Burns, president of the 26-store chain, said the pay discrepancies resulted from a misunderstanding of wage and hour rules, as well as the week-to-week fluctuations of sales commissions.
"I have some employees who make $70,000 a year in commissions, but if they have one pay period with very few sales, then there could be a problem (complying with wage and hour regulations)," Burns said.
Prior to the Labor Department audit, he said sales associates were paid full commission or $7.25 per hour, whichever was greater. Now, they're paid full commission or $10.89 per hour, which is 1½ times the minimum wage.
"Our employees are paid very well, and we want to continue to do that," said Burns.
He noted that the Labor Department did not assess any fine or civil penalty against the company.
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Mattress retailer pays back wages
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