Williams v. General Nutrition Centers, Inc.

166 A.3d 625, 326 Conn. 651, 2017 WL 3575105, 2017 Conn. LEXIS 241
CourtSupreme Court of Connecticut
DecidedAugust 17, 2017
DocketSC19829
StatusPublished
Cited by9 cases

This text of 166 A.3d 625 (Williams v. General Nutrition Centers, Inc.) is published on Counsel Stack Legal Research, covering Supreme Court of Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Williams v. General Nutrition Centers, Inc., 166 A.3d 625, 326 Conn. 651, 2017 WL 3575105, 2017 Conn. LEXIS 241 (Colo. 2017).

Opinion

D'AURIA, J.

Connecticut law requires employers to pay certain employees one and one-half times their "regular rate" of pay for any overtime hours they work. General Statutes § 31-76c. Calculating overtime pay for employees paid a fixed hourly wage is straightforward-their "regular rate" is their hourly wage, so they must be paid one and one-half times their hourly wage for each overtime hour worked. General Statutes § 31-76c. But for employees paid in whole or in part by commission, their average hourly rate will tend to fluctuate, leaving them without a readily apparent regular rate to use for calculating overtime pay. In the present case, we are asked to consider how employers must determine the regular rate for retail employees whose pay fluctuates each week because they receive commissions.

I

This case comes to us on a certified question from the United States District Court for the District of Connecticut. The factual record, although limited, contains the following facts. The plaintiffs, Cole Williams and Novack Lazare, worked as managers at General Nutrition Centers (GNC) stores in Connecticut, which are owned and operated by the defendants, General Nutrition Centers, Inc., and General Nutrition Corporation. The plaintiffs were paid a base weekly salary, plus commissions on sales of certain premium merchandise, and they received overtime pay whenever they worked more than forty hours in a week. Their base salaries were fixed, but their commission payments fluctuated week to week based on their sales.

The defendants calculated the plaintiffs' overtime pay using a method allowed under federal law, commonly known as the fluctuating workweek 1 method (fluctuating method). See Overnight Motor Transportation Co . v. Missel , 316 U.S. 572 , 579-80, 62 S.Ct. 1216 , 86 L.Ed. 1682 (1942) ; 29 C.F.R. §§ 778.114 and 778.118 (2016). This method is used to calculate the regular rate for salaried employees whose work hours fluctuate week to week and for employees whose pay varies each week because of commissions. See Overnight Motor Trans portation Co . v. Missel , supra, at 579-80, 62 S.Ct. 1216 ; 29 C.F.R. §§ 778.114 and 778.118 (2016). Because these employees do not have a consistent hourly rate of pay, their regular rate is calculated each week by dividing their total weekly pay by the number of hours they worked during the week. See 29 C.F.R. §§ 778.114 and 778.118 (2016). This formula yields their regular rate for that week, which is used to determine their overtime pay. For example, if an employee has a weekly salary of $500 and works fifty hours in a given week, his regular rate is $10 per hour ($500/50), and his overtime rate is $15 per hour ($10 x 1.5). Because the employee has received only $10 per hour for each hour worked, he must be paid an additional $5 for each overtime hour to bring his pay to the required $15 per hour rate for all hours in excess of forty.

Under the fluctuating method, the employee's regular rate, and, therefore, his overtime pay rate, decreases as he works more overtime hours if he is paid a fixed salary. See Overnight Motor Transportation Co . v. Missel , 316 U.S. at 579-80 , 62 S.Ct. 1216 ;

Stokes v. Norwich Taxi, LLC , 289 Conn. 465 , 479-80, 958 A.2d 1195 (2008). For example, suppose an employee is paid $500 per week and, in the first week, works fifty hours and, in the second week, works sixty hours. In the first week, the employee's regular rate is $10 per hour ($500/50); in the second week, it is $8.33 per hour ($500/60). The employee is entitled to one and one-half times his regular rate of pay for overtime hours, meaning that his overtime rate for the first week is $15 ($10 x 1.5) per overtime hour, whereas his overtime rate in the second week is $12.50 ($8.33 x 1.5) per overtime hour.

The plaintiffs brought an action against the defendants in the District Court, 2 claiming that the defendants'

use of the fluctuating method to calculate the plaintiffs' regular rate for purposes of determining their overtime pay rate violated Connecticut wage laws. 3 The plaintiffs rely on a state Department of Labor (department) fair minimum wage order (wage order) governing the calculation of overtime pay for mercantile (or retail) employees. 4 The plaintiffs contend that the wage order prohibits use of the fluctuating method because it requires use of an alternative formula. See Regs., Conn. State Agencies § 31-62-D4. Under the plaintiffs' interpretation of the wage order, an employer must calculate an employee's regular rate of pay by dividing his total weekly pay by the hours he usually works in a week, not the hours he actually works. For the plaintiffs, who claim they usually worked forty hour workweeks, this would yield a higher regular rate of pay than the fluctuating method would yield, which in turn would yield a greater overtime rate. For instance, if an employee made $500 per week, and worked fifty hours, his regular rate under the fluctuating method would be $10 per hour ($500/50), and he would be entitled to $15 for each overtime hour. But, if he usually worked forty hours per week, his regular rate would be $12.50 per hour ($500/40), and he would be entitled to $18.75 for each overtime hour.

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Cite This Page — Counsel Stack

Bluebook (online)
166 A.3d 625, 326 Conn. 651, 2017 WL 3575105, 2017 Conn. LEXIS 241, Counsel Stack Legal Research, https://law.counselstack.com/opinion/williams-v-general-nutrition-centers-inc-conn-2017.