Chapter Three
Contextual Influences on
Compensation Practice
Figure 3-1
Employers’, Employees’, and Government’s Goals
Employers
Government
Employees
Employment Discrimination

Employment discrimination—
employment decision making or working
conditions that are advantageous (or
disadvantageous) to members of one
group compared to members of another
group
Most Frequently Used Sources
of Redress

Federal laws
» Title VII of the 1964 U.S. Civil Rights Act, as
amended in 1991—to prohibit discrimination
based on race, color, religion, sex, or national
origin
» Age Discrimination in Employment Act (ADEA) of
1967, as amended in 1978 and 1986—to prohibit
discrimination against persons age 40 and older
» Americans with Disabilities Act of 1990 (ADA)—to
prohibit discrimination against persons with
disabilities
U.S. Equal Employment Opportunity
Commission (EEOC)

EEOC—an agency of the U.S.
Department of Labor created to monitor
and enforce compliance with Title VII
» files suits against organizations for violations of
the law
» issues interpretive regulations regarding
employment practices
» www.eeoc.gov has plenty of useful info!
What is Not Prohibited by Title VII?

Discrimination based on the following even
when the use of such practices may be
correlated with race, gender, color, religion, or
national origin:
»
»
»
»

seniority systems
veterans’ preference rights
national security reasons
job qualifications based on test scores, backgrounds, or
experience
Bona fide occupational qualifications
(BFOQs) or discriminatory practices
whenever these practices are “reasonably
necessary to the normal operation of the
organization”
Testing your applied knowledge: EEO
Scenario: Sarah’s Surprise is a retail chain specializing in women’s
lingerie. Sarah’s Surprise employs mostly female sale associates, but there
are also some male employees in most stores. However, male employees
are assigned to the back of the store, and are normally charged with stocking
merchandise. Because sales associates work on commission, a male
employee is complaining that his income can never match the one of his
female coworkers, because he is not allowed to work on the sales floor. He is
threatening to suit the store on the grounds of sex discrimination. Which of
the following courses of action would you recommend to this company?
I want to make
some money too!
a.
b.
c.
d.
Open up 1/3rd of the sales positions to male candidates.
Open up the sales positions to male candidates, but make sure
there are enough female employees to help customers.
Raise the base pay of stocking clerks.
Argue that the sales position is a BFOQ that calls for female
employees.
Testing your applied knowledge: EEO
I want to make
some money too!
The following answers are correct:
a.
Open up 1/3rd of the sales positions to male candidates.
b.
Open up the sales positions to male candidates, but make sure
there are enough female employees to help customers.
c.
Raise the base pay of stocking clerks.
d.
Argue that the sales position is a BFOQ that calls for female
employees.
Explanation. The company should be able to make a business case that,
when it gets to women lingerie, having sufficient female salespeople helps,
because many customers feel more comfortable buying women lingerie from
other women. However, it’d be unreasonable to close the doors to all males,
because customer preferences are not enough of a reason to declare a rigid
BFOQ. Reserving 1/3rd of the positions for males would imply making gender
a job requirement. Raising the base pay of stocking clerks ignores job worth
and it may have a negative impact on pay structures.
Theories Used in Title VII
Cases

Disparate or differential treatment—
plaintiffs must show that an employer
treats one or more members of a
protected group differently
» burden on the plaintiff to prove that the employer
intended to discriminate because of race, sex,
color, religion, or national origin
Theories Used in Title VII Cases
 Disparate
or adverse impact—plaintiffs must
show that an employer’s practices had a
disparate impact on members of the protected
group by showing that the employment
procedures (e.g., tests, interviews,
credentials) had a disproportionately negative
effect on members of a protected group
» burden begins with the plaintiff showing evidence of adverse
or disparate impact (the 80% or 4/5ths rule).
» burden shifts to the employer to produce evidence of
“business necessity” and job relatedness” for the employment
practice
» burden shifts back to the plaintiff who must show that an
alternative procedure is available that is equal to or better than
the employer’s practice and has less adverse impact
Burden of Proof in Title VII
Cases
Differential treatment
Adverse impact
plaintiff
defendant
Business necessity
Burden of proof
Testing your applied knowledge: EEO
Scenario: A cable TV company is downsizing its operations nationwide. The company is concerned that the downsizing effort may be
challenged in court on the grounds that it is discriminatory. Which
one(s) of the following courses of action would you recommend to
this cable company?
Go?
a.
b.
c.
Stay?
Make sure to terminate about the same number of individuals from
each gender and ethnic group.
Before you terminate anyone, offer separation packages to those
who wish to resign voluntarily.
Terminate approximately similar proportions of individuals across
race and gender groups.
Testing your applied knowledge: EEO
Stay?
Go?
The following answers are correct:
a.
Make sure to terminate about the same number of individuals
from each gender and ethnic group.
b.
Before you terminate anyone, offer separation packages to
those who wish to resign voluntarily.
c.
Terminate approximately similar proportions of individuals
across race and gender groups.
Explanation: The 80% or 4/5ths rule deals with ratios or proportions of
employees, not with absolute numbers, which may be misleading due to
differences in the number of individuals that exist in the various
populations (e.g., minorities outnumber non-minorities in some areas).
Offering separation packages eases the transition for those who lose their
job, and it reduces the likelihood that disgruntled ex-employees may sue
the company, but the best employees may leave –and the worst may stay!
Affirmative Action

Affirmative action—the extent to which
employers make an effort through their
personnel practices to attract, retain, and
upgrade members of the protected classes of
the 1964 Civil Rights Act or persons with
disabilities
» examples of affirmative action strategies:
– actively recruiting underrepresented groups in a firm
– changing management and employee attitudes about
various protected groups
– eliminating irrelevant employment practices that bar
protected groups from employment
– granting preferential treatment to protected groups
Affirmative Action/Diversity Programs
 Criteria
»
»
»
»
»
»
for voluntary affirmative action plans must:
be designed to eradicate old patterns of discrimination
not impose an “absolute bar” to white advancement
be temporary
not “trammel the interests of white employees”
be designed to eliminate a “manifest racial imbalance”
show preference only from a pool of equally qualified
candidates
 Involuntary
affirmative action plans may legally show
preferential treatment when the program:
» is necessary to remedy “pervasive and egregious discrimination”
» is used as a flexible benchmark for court monitoring, rather than as
quota
» is temporary
» does not “unnecessarily trammel the interest of white employees”
Testing your applied knowledge: Affirmative Action
Scenario: Occaluchee County wants to have an internal promotion in the
road maintenance area. The AA plan includes increasing female
representation in management by 20% in the next five years. The internal job
announcement requires 5 years of road maintenance experience, plus a
college degree (preferred). There are three candidates. Jane Road has 7
years of experience and a college degree. Joe Bitterways has a college
degree and 11 years of experience. Jim Deadend has 20 years of
experience, but no degree. In the panel interview, Jim Bitterways received a
rating of 5 (5 = highly qualified), Jane Road received a 4, and Jim Deadend
also a 4. Which decision(s) would you recommend to the county?
Jane?
a.
b.
c.
d.
Joe?
Jim?
hire Mr. Bitterways, who is the highest scoring candidate.
hire Ms. Road.
have Mr. Bitterways and Ms. Road go through a 2nd interview.
offer the job to Mr. Bitterways and, if he doesn’t take it, offer it to
Mr. Deadend (being male is a BFOQ in road maintenance).
Testing your applied knowledge: Affirmative Action
Jane?
Joe?
Jim?
The correct answer is:
a.
hire Mr. Bitterways, who is the highest scoring candidate.
b.
hire Ms. Road.
c.
have Mr. Bitterways and Ms. Road go through a 2nd interview.
d.
offer the job to Mr. Bitterways and, if he doesn’t take it, offer it to
Mr. Deadend (being male is a BFOQ in road maintenance).
Explanation: The differences in years of experience and interview ratings do
not make these applicants significantly different from each other. The AA goal
should allow the company to give preferential treatment to the female,
especially if females were not represented among the interview panelists!
Age Discrimination in Employment Act
of 1967, Amended 1978 and 1986

Requirements for establishing a prima facie
case of age discrimination are as follows:
» the employee is a member of the protected age group (40
and older)
» the employee has the ability to perform satisfactorily at some
absolute or relative level (e.g., relative to other employees
involved in the decision process or at an absolute standard
of acceptability)
» the employee was not hired, promoted, or compensated, or
was discharged, laid off, or forced to retire
» the position was filled or maintained by a younger person
(just younger, not necessarily under age 40)
Americans with Disabilities Act of 1990
(ADA)

1999 EEOC Policy Guidance on Reasonable
Accommodation Under ADA suggests the
following for assessing reasonable
accommodation:
» look at the particular job involved; determine its purpose and
its essential function
» consult with the individual with the disability to identify
potential accommodations
» if several accommodations are available, preference should
be given to the individual’s preferences
Table 3-6
Glass Ceiling Barriers: The Glass Ceiling
Commission’s Major Findings (1 of 2)


Societal barriers that may be outside the direct control of
business
» The supply barrier related to educational opportunity and
attainment
» The difference barrier as manifested in conscious and
unconscious stereotyping, prejudice, and bias related to
gender, race, and ethnicity
Internal structural barriers within the direct control of business
» Outreach and recruitment practices that do not seek out or
reach or recruit minorities and women
» Corporate climates that alienate and isolate minorities and
women
Source: Fed. Glass Ceiling Commission, Good for business: Making full use of the nation’s human capital (Washington, D.C.:
U.S. Government Printing Office, March, 1995).
Table 3-6
Glass Ceiling Barriers: The Glass Ceiling
Commission’s Major Findings (2 of 2)


Internal structural barriers within the direct control of business
(cont.)
» Pipeline barriers that directly affect opportunity for
advancement (initial job placements, lack of mentoring, lack
of management training, lack of career development, counterproductive behavior and harassment by colleagues)
Governmental barriers
» Lack of vigorous, consistent monitoring and law enforcement
» Weaknesses in the formulation and collection of employmentrelated data that make it difficult to ascertain the status of
groups at the managerial level and to disaggregate the data
» Inadequate reporting and dissemination of information
relevant to glass ceiling issues
Expatriates and EEO Laws

The Civil Rights Act, the ADEA, and the
ADA all have extraterritoriality which
cover the following workers:
» an American working for an American corporation
on foreign soil
» resident aliens working for foreign companies on
U.S. soil, with some exceptions
What the Future Holds

Trends in EEO
» increase in affirmative action litigation and legislation
– more state constitutional amendments or legislation
– increasing number of class-action lawsuits likely
» increase in number of ADEA cases due to an aging
workforce and the increasing proportion of workers who are
over 39
» increase in number of companies seeking employment
practices liability insurance
Testing your applied knowledge: Pay Discrimination?
Consider the following salary figures for a retail chain.
Based on these data, is this employer managing the risk of
a discrimination lawsuit adequately?
Position Average earnings
Store manager
Co-manager
Asst. manager
Mgt. trainee
Cashier
Women
$89,300
$56,300
$37,300
$22,400
$13,800
Men
$105,700
$59,500
$39,800
$23,200
$14,500
%Women
14%
22.8%
35.7%
41.3%
92.5%
a. Yes, the data show no adverse impact by gender.
b. No, the data show adverse impact by gender.
c. Can’t tell based on just these data
%Men
86%
77.2%
64.3%
58.7%
7.5%
Testing your applied knowledge: Pay Discrimination?
Position Average earnings
Store manager
Co-manager
Asst. manager
Mgt. trainee
Cashier
Women
$89,300
$56,300
$37,300
$22,400
$13,800
Men
$105,700
$59,500
$39,800
$23,200
$14,500
%Women
14%
22.8%
35.7%
41.3%
92.5%
%Men
86%
77.2%
64.3%
58.7%
7.5%
a. Yes, the data show no adverse impact by gender.
b. No, the data show adverse impact by gender.
c. Can’t tell based on just these data
Explanation: Without data on the number of applicants,
it’s difficult to make a judgment. However, these data
violate the 4/5ths or 80% rule, and therefore they may
suffice to shift the burden of proof to the employer.
The Fair Labor Standards Act (FLSA)
Enacted in 1938 to buffer the effects of
the Great Depression on workers.
 Regulates overtime pay and its
exemptions.
 Regulates trainee status.

Table 3-2
Six Defining Factors of Trainee for the FLSA






The training, even though it includes actual operation of the
employers’ facilities, is similar to that which would be provided in
a vocational school.
The training is for the benefit of the trainee.
The trainee does not displace regular employees but works
under closer supervision.
The employer providing the training gains no immediate
advantage from the trainees’ activities; on occasion, the
employer’s operation may in fact be hindered.
The trainee is not guaranteed a job at the completion of the
training.
The employer and the trainee understand that the employer is
not obligated to pay wages during the training period.
Source: J.E. Kalet, Primer on wage and hour laws (Washington, DC: Bureau of National Affairs, 1987).
FLSA


“White Collar” Exemptions- The FLSA
exempts from its overtime provisions
“any employee employed in a bona fide
executive, administrative, professional
or in the capacity of outside salesman”
who is paid on a “salary basis.”
FLSA provides minimum standards.
States may opt to exceed those
standards
Recent Changes Include:





Eligibility For Exemption: Minimum salary level
increased from $155 per week to $455 per week
New exemption for those who earn at least $100,000
annually
Long and short “duties” tests replaced with standard
duties test, which focuses on primary duty now..
Executive employees must have authority to hire,
fire, promote, or change employee status.
The “primary duty” requirement for exempt status
has been changed to make clear that the emphasis is
on the principal character of the job, and not the
percentage of time spent performing the primary
duty.
Recent Changes Include: (cont)




Broadened “artistic” exemption to include
“creative” professionals.
Exemptions do not apply to “blue collar” workers.
Exemptions, generally, will not apply to public
safety & health employees & other first
responders.
Exemption to salary basis test:
» Deductions for workplace misconduct (must be
in policy).
» “Safe harbor” rule.
Tests To Determine Exempt
Employees

Standard Duties Test

» Applies to all employees who
earn between $455 per week
($23,660 annually) and
$100,000 per year.
» The $455 per week may be
translated into equivalent
amounts for periods longer
than one week.
» Guaranteed overtime if
employees earns less than
$455 per week ($23,660
annually) regardless of job
duties.
Highly Compensated
Employee Test
» Total annual compensation at least
$100,000
– Includes commission, nondiscretionary bonuses.
– Does not include insurance
payments, retirement plans,
fringe benefits.
» At least $455 per week paid on
salary or fee basis
» Employee customarily and regularly
performs one or more of the exempt
duties of an executive,
administrative or professional
employee.
» Make-up payments
Determining Exemptions By
Classifications (must meet the following criteria)



Executive Employees
Salary $455 per week

Primary duty of the management of
the enterprise or a recognized
department or subdivision.
Customarily and regularly directs
the work of two or more other
employees.
Has authority to hire or fire other
employees (or recommendations as
to hiring, firing, promotion or other
change of status of other
employees are given particular
weight).
Administrative Employees
Salary $455 per week
Primary duty of performing
office or non-manual work
directly related to
management policies or
general business operations
of the employer or the
employer’s customers.
Customarily and regularly
exercises discretion and
independent judgment with
respect to matters of
significance (see slide 9).
Determining Exemptions By
Classifications (cont.)
Learned Professional Employees
Salary $455 per week
•
Primary duty of performing office
or non-manual work requiring
knowledge of an advanced type in a
field of science or learning
customarily acquired by a
prolonged course of specialized
intellectual instruction, but which
also may be acquired by alternative
means such as an equivalent
combination of intellectual
instruction and work experience.
•
Consistently exercises discretion
and judgment.
Creative Professional
Employees
Salary $455 per week
Primary duty of performing
work requiring invention,
imagination, originality or
talent in a recognized field
of artistic or creative
endeavor.
Determining Exemptions By
Classifications (cont.)
Computer Employees
Salary $455 per week or $27.63 an hour
•
Primary duty of (A) application of
systems analysis techniques and
procedures, including consulting with
users, to determine hardware, software
or system functional applications; or (B)
design, development, documentation,
analysis, creation, testing, or
modification of computer systems or
programs, including prototypes, based on
and related to user or system design
specifications; or (C) design,
documentation, testing, creation or
modification of computer programs
related to machine operating systems; or
(D) a combination of duties described in
(A), (B) and (C), the performance of
which requires the same level of skills.
Outside Sales Employees
Salary None required for
exempt status.
 Primary duty of making
sales; or of obtaining
orders or contracts for
services or for the use
of facilities for which a
consideration will be
paid by the client or
customer.
•
Customarily and
regularly engaged away
from the employer’s
place or places of
business.
Exercise of Discretion and Independent Judgment
(must meet at least 3 to be considered Exempt)
Factors
to consider in evaluating the exercise of discretion and independent
judgment include, but are not limited to:
a) Has the authority to formulate, affect, interpret, or implement management
policies or operating practices;
»b)
Carries out major assignments in conducting the operations of the business;
»c)
Performs work that affects business operations to a substantial degree, even
if the employee’s assignments are related to a particular the operations of the
business.
»d)
Has the authority to commit the employer in matters that have significant
financial impact;
»e)
Has the authority to waive or deviate from the established policies and
procedures without prior approval;
»f)
Has the authority to negotiate and bind the company on significant matters;
»g)
Provides consultation or expert advice to management;
»h)
Is involved in planning long or short term business objectives;
»i)
Investigates and resolves matters of significance on behalf of management;
and
»j)
Represents the company in handling complaints, arbitrating disputes, or
resolving grievances.
Testing your applied knowledge: FLSA
Scenario: You are a manager working for a local bank. Your bank
tellers are behind schedule, and you need to meet an important
deadline next week. However, you have already exceeded your
overtime budget for this year by 5%. Which one(s) of the following
courses of action conform to the FLSA provisions?
I wish I could pay you
overtime, but…
a.
b.
c.
d.
Ask your employees to work extra hours and take the same no. of
hrs in comp time instead of paid overtime.
Ask for volunteers who are willing to work overtime and not
receive overtime pay.
Ask supervisors to stay late and complete the bank tellers’
work.
Ask employees to work overtime at 1.5 times their regular
compensation.
Testing your applied knowledge: FLSA
The correct answer is:
a.
I wish I could pay you
overtime, but…
Ask your employees to work extra hours and take the same no. of
hrs. in comp time instead of paid overtime.
b.
Ask for volunteers who are willing to work overtime and not
receive overtime pay.
c.
Ask supervisors to stay late and complete the bank tellers’ work.
d.
Ask employees to work overtime at 1.5 times their regular
compensation.
Explanation: The FLSA was enacted to ensure that employees receive
adequate compensation for overtime work; 1.5 times is the legal rate for
overtime. Asking for volunteers to work without receiving overtime pay may
backfire when these or other employees complain, and the company may be
liable for back-pay plus interest! Supervisors are exempt because of the
nature of their responsibilities; asking them to take over non-exempt jobs will
run against the same reason they were made exempt, and thus they may
claim overtime pay. Taking comp time in lieu of overtime is legally risky; at the
very least, employees should be provided 1.5 hrs. for every hr. of overtime,
and this should be a formal policy applied to everyone consistently.
Compensatory Time Under
FLSA




Compensatory time off may sometimes be
offered instead of cash overtime.
The rate is the same as for cash.
Public employees can accumulate
compensatory time.
In the private sector, the practice of allowing
compensatory time must be part of an
established plan.
Case Study: Class-action lawsuit
Mckenzie v. Kindred Hospitals East LLC
A St. Petersburg hospital was sued for overpayments that
allegedly were not made to pharmacists who worked at the hospital. The
hospital responded to the suit by stating that the pharmacists were
exempt from overtime compensation as professional employees.
The suit was filed by David Mckenzie, one of the hospital
pharmacists. After the case was filed, the parties engaged in discovery
(or the pretrial exchange of facts). The hospital produced Mckenzie’s
payroll and time records, which established that he had worked a total of
32.5 hours of overtime during the period in question. Although the
hospital claimed that there was no violation of the FLSA, it offered to
compensate him in full for all of his claimed overtime hours.
Case study(continued)
Mckenzie accepted the offer but kept the lawsuit going by
claiming that the other pharmacists also wanted to be included in the
suit. He asked the court to designate the case as a class action and to
notify potential employees of the opportunity to join the lawsuit. He also
asked the court for an order compelling the hospital to produce a
computer readable data file containing the names, addresses, social
security and telephone numbers of other employees so that they could
be notified and given a chance to join in.
The court denied that request, noting that Mckenzie had the
burden to present evidence that other individuals were interested in
joining the lawsuit and that none had been identified.
Case study (continued)
How much should the hospital offer to compensate for the unpaid overtime?
This pharmacist’s total overtime compensation was $552.33, and yet the
company offered $1,200. Under wage and labor law, an employee can recover
liquidated damages in an amount equal to his/her actual damages (unpaid
wages). An employee can recover unpaid wages going back two years, and up
to three years if s/he can prove that the employer’s violation was “willful.”
Most common violations of the FLSA involve:
» misclassification of exempt status
» working “off the clock”
» using “comp time” instead of paying for
overtime
» Inaccurate or incomplete record-keeping
Table 3-4
Compensable Activities That Precede and Follow
Primary Work Activities (Portal to Portal Act of 1947)






The time spent on the activity was for the employer’s benefit.
The employer controlled the amount of time spent.
The time involved is categorized as “suffered and permitted,”
meaning that the employer knew the employee was working on
incidental tasks either before or after the scheduled tour of
duty.
The time spent was requested by the employer.
The time spent is an integral part of the employee’s principal
duties.
The employer has a union contract with employees providing
such compensation, or, as a matter of custom or practice, the
employer has compensated the activities in the past.
Testing your applied knowledge: Portal to Portal Act
Scenario: Upon arriving to work, a customer service agent takes
between 10 and 15 minutes to organize his desk, boot the computer,
test the headphones, microphone, and other equipment. His manager
claims that 15 minutes is way too much time for these preparatory
tasks. Which of the following actions would you recommend to this
manager?
You better hurry up
and start working!
a.
b.
c.
d.
Inform the employee that you will not start paying him until he
actually starts answering calls from customers.
Ask the employee to clock in after he has already prepared
and tested all the equipment.
find out what is the average time that other customer service
agents take to perform these preparatory tasks.
give the employee a verbal warning
Testing your applied knowledge: Portal to Portal Act
You better hurry up
and start working!
The correct answer is:
a.
Inform the employee that you will not start paying him until he
actually starts answering customer calls.
b.
Ask the employee to clock in after he has already prepared and
tested all the equipment.
c.
find out what is the average time that other customer service
agents take to perform these preparatory tasks.
d.
give the employee a verbal warning
Explanation: These are probably incidental tasks dealing with necessary
preparation for work; therefore, they are compensable activities under the
Portal to Portal Act. However, this employee may take excessive time on
these incidental tasks. Finding out what the average time (and its range or
standard deviation) needed for these incidental tasks would be necessary
before such a determination can be made. If a performance problem were
determined, a verbal warning would be justified.
Table 3-1
Differences Between Annual Minimum Wage Earnings
and Annual Poverty Thresholds for Selected Years
YEAR
1980
1986
1989
1990
1992
1994
1996
1998
ANNUAL MINIMUM
WAGE EARNINGS
(hourly min. wage ANNUAL POVERTY
x 40 hr/week x
THRESHOLD
52 weeks)
(family of three) DIFFERENCE
FED. MINIMUM
A
B
HOURLY WAGE
A-B
$3.10
$3.35
$3.35
$3.80
$4.25
$4.25
$4.75
$5.15
$6,448
$6,968
$6,968
$7,904
$8,840
$8,840
$9,880
$10,712
$6,565
$8,737
$9,885
$10,419
$11,186
$11,542
$12,156
$12,750
-$ 117
-$1,769
-$2,917
-$2,515
-$2,346
-$2,702
-$2,276
-$2,038
Source: US Dept. of Commerce, Statistical abstracts of the US, 119th ed. (Washington, DC: US Government
Printing Office, 1999).
Table 3-5
U.S. Department of Labor Definitions of
Compensable Factors
Factor
Skill
Effort
Responsibility
Working
conditions
Definition
Experience, training, education, and ability as
measured by the performance requirements of a
job
The amount of mental or physical effort expended
in the performance of a job
The degree of accountability required in the
performance of a job
The physical surroundings and hazards of a job,
including dimensions such as inside versus
outside work, heat, cold, and poor ventilation
Source: U.S. Department of Labor, Equal pay for equal work under the Fair Labor Standards Act
(Washington, D.C.: U.S. Government Printing Office, December 31, 1971).
Table 3-8
Average Weekly Earnings by Industry Group,
1980 to 1998
INDUSTRY
1980
1985
1990
1995
1998
Mining
$397
$520
$603
$684
$744
Construction
$368
$464
$526
$587
$643
Manufacturing
$289
$386
$442
$515
$563
Transportation, public utilities
$351
$450
$496
$557
$606
Wholesale trade
$267
$351
$411
$476
$538
Finance, insurance, real estate
$210
$289
$357
$442
$512
Services
$191
$257
$319
$369
$420
Retail Trade
$147
$175
$194
$221
$255
Source: U.S. Dept. of Commerce, Statistical abstracts of the United States, 119th ed. (Washington, D.C.: U.S. Government
Printing Office, 1999).
Discussion Question 3-1
A consulting company specializes in helping plaintiffs
challenge the classification of “exempt” employees.
This consulting company works with groups of
employees who disagree with their employer’s
decision to classify their jobs as “exempt.” These
lawsuits usually asks for retro-active, unpaid
overtime.
What would be the procedure that this consulting
company should follow to support the plaintiffs’
claim?
What kinds of measures can employers take to
prevent this kind of lawsuit?