Hagan and Hagan Inc. failed to pay overtime to managers at six franchise locations
NEW BERN, NC – A U.S. Department of Labor investigation has recovered $56,900 for 31 assistant general managers employed by the operator of six Taco Bell franchise locations in North Carolina who shortchanged them by incorrectly denying them overtime wages.
The Fair Labor Standards Act allows overtime pay requirements to be waived for salaried managers who meet minimum salary and other management requirements. The law states that employers may claim only up to 10 percent of bonuses, commissions or incentive pay toward the minimum salary requirement of $684 per week. The manager’s minimum salary requirement must be made up of a full 90 percent salary and no more than 10 percent bonuses and incentives received.
The department’s Wage and Hour Division determined that Taco Bell franchisee Hagan and Hagan Inc. paid the affected managers a combination of salary and nondiscretionary bonuses, incentives and commissions in violation of FLSA requirements. More than 10 percent of the manager’s salary came from bonuses, incentives and commissions. As a result, the waiver of the overtime requirement did not apply and the employer was required to make overtime payments to these managers for hours over 40 in a workweek.
In addition, investigators learned Hagan and Hagan allowed five 15-year-old employees to work outside of the hours legally allowed, in violation of federal child labor laws. The employer...
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