McLane Co., Inc., a wholesale distributor of food and grocery products, has agreed to pay $1,559,316 in unpaid overtime wages to 570 current and former employees after the Department of Labor found that the company had misclassified the employees as exempt from the overtime pay requirements of the Fair Labor Standards Act. The company had erroneously classified the employees, who were “retail merchandising specialists,” as exempt outside sales employees and failed to keep records of their hours worked. The outside sales exemption applies to employees whose primary duty is making sales, or obtaining orders or contracts for services or the use of facilities, and the employee must be customarily and regularly away from the employer’s place of business. The FLSA requires employers to pay all employees “time and one-half” for all hours worked over 40 in a workweek, unless the employer can show the employee qualifies for an exemption. Employers in many industries misclassify their employees as exempt from the overtime pay requirements of the FLSA under exemptions, including the outside sales exemption.
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