Many of the Costco employees fall under the non-exempt category of employment and MUST be paid overtime wages according to the guidelines laid out in the Fair Labor Standard Act (FLSA). The FLSA sets the overtime rate for non-exempt employees at time and one-half their standard rate of pay for any time worked over 40 hours in a single week.
The FLSA regulations do not apply to “administrative” or “professional” employees due to exemptions preventing specific categories of employees from receiving overtime pay.
Exemptions are not based entirely on one’s job title, however. Whether or not an employee should receive overtime pay is calculated by the hours worked, the rate of pay, the job duties, and even the job description.
It’s always a good idea to speak with an attorney with experience in overtime pay laws due to issues with additional state laws governing overtime pay. These laws sometimes overlap federal laws and further complicate or contradict the FLSA
Founded in 1976 by James Sinegal and Jeff Brotman, Costco Wholesale Corporation, trading as Costco, is an American multinational corporation which operates a chain over membership-only warehouse clubs. As of 2018, Costco is the 4th largest retailer in the U.S. with $93 billion in annual revenue. Currently, they have 750 warehouses worldwide and employs roughly 220,000 full and part time workers. Although they are an international corporation, nearly 75% of Costco sales are executed within the U.S. As of 2016, Costco was the world’s largest retailer of choice and prime beef, organic foods, rotisserie chicken, and wine. The Costco Sales Model focuses on selling products at low prices, often at very high volume. These goods are usually bulk-packaged and marketed primarily to large families and businesses. Furthermore, Costco does not carry multiple brands or varieties where the item is essentially the same except when it has a house brand to sell, generally under the Kirkland Signature label. For example, a typical Costco warehouse carries only 4,000 distinct products, while a typical Walmart Supercenter carries approximately 140,000. As a household name, retailing powerhouse, and large private employer, Costco is well regarded and remains in careful watch of the public eye.
Numerous non-exempt Costco employees may be required to start before their shifts or even work after their shifts finish off the clock. It is not uncommon for employees to work double shifts as well. Because of this, if many Costco employees exceed 40 working hours in a single week, they should receive overtime pay.
Employers have been known to illegally misclassify positions to avoid paying overtime. For instance, Costco shift or location managers may have been labeled “managers” with the goal of marking them exempt from overtime pay. However, these employees are in fact non-exempt because of the nature of their job duties.
Often companies label employees as managers even though they do not fill vital roles for the business. The FLSA dictates that “managers” must have specific abilities, for instance, hiring or firing employees, making schedules, or completing other tasks that are essential to the running of the business. Typically these employees do not perform these duties and are instead only labeled as managers for employers to save money by avoiding paying overtime.
Another unlawful practice that the Costco may perform is having employees clock in before a shift or asking them to stay after a shift without compensating them. This practice of manipulating time cards to keep payroll costs down is a violation of the FLSA and can result in a lawsuit.
An experienced lawyer can analyze your case and see if you are entitled to lost overtime wages from Costco by evaluating how state and federal laws apply to your situation.
For the most part, Costco must pay overtime to non-exempt employees who work more than 40 hours in a week as long as they are not excluded by the FLSA. However, these exemptions become more complicated by some states that have additional laws governing them.
If you feel like you have been denied overtime wages, then it is in your best interest to consult an attorney with FLSA experience and knowledge of state overtime laws.
Here are a few examples from the many previous lawsuits that have been issued against other employers for failing to pay overtime wages:
If you feel as though Costco or any another employer has denied you overtime wages, you could have a case. Please get in touch with the Lemberg Law legal team. Complete our form for a FREE case evaluation, or call 475-277-2200 NOW. Lemberg Law will evaluate your case as see if you are eligible to receive lost overtime wages as a non-exempt employee.
Sergei Lemberg is a lawyer whose practice focuses on consumer law, class actions and personal injury litigation. He has been repeatedly recognized as the “most active consumer attorney” in the country. In 2020, Mr. Lemberg represented Noah Duguid in the United States Supreme Court in the case entitled Duguid v. Facebook. He is the author of Defanging Debt Collectors, a book that teaches consumers how to battle debt collectors and win.
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