A new class action lawsuit claims Pontiac, Michigan-based JAC Products, Inc. failed to pay hourly workers all the overtime compensation they deserved in violation of the federal Fair Labor Standards Act.
Differential Compensation, Attendance Bonuses, and Peak-Demand Pay
According to the allegations, the plastic products manufacturer established a compensation structure that included routine and non-discretionary bonuses for hourly employees. For example, a worker could earn:
- A differential of $0.55 per hour for working the second shift
- An attendance bonus of $50 per or $200 per month
- An extra $100 for perfect monthly attendance
Due to the pandemic, JAC experienced an increased workload but with fewer employees. In response, the company instituted a peak-demand pay policy, which entitled workers to an additional $1.25 for each hour worked until the company phased out the pay premium in March 2021.
Miscalculating Overtime Pay and Undercompensating Hourly Employees
JAC employed the lead plaintiff and other similarly-situated workers as operators, line leaders, and other manufacturing jobs, paying them an hourly wage. Assuming a $14.00 hourly wage, a worker could earn an additional $0.55 per hour for the shift differential and $1.25 per hour as peak-period pay.
The company should have determined time-and-a-half based on the employee’s regular rate of $15.80—more if the person received monthly attendance bonuses. Instead, JAC calculated overtime on the $14.00 hourly rate, denying the worker an extra $2.70 per hour ($1.80 x 1.5) or $108 per week based on a 40-hour workweek.
If the employee earned the full $300 perfect attendance bonus, JAC should have also factored that amount into its overtime calculation. If the person put in four 40-hour weeks per month, the attendance bonus translated into $1.88 per hour, with time-and-a-half equaling $2.82 per hour or $112.8 per week.
Based on these very realistic work hours and pay enhancements, JAC withheld more than $220 per week in overtime pay from the employee.
Stopping Wage Abuse and Getting Hourly Worked Paid
The attorneys in Sommers Schwartz’s Employment Litigation Group represent JAC hourly employees entitled to increased overtime pay as required by federal law. The class action is pending in the U.S. District Court for the Eastern District of Michigan.
If you or someone you know has worked for JAC Products in an hourly job and believes the company owes you for your hard-earned overtime compensation, please contact us today. We’re here to help.
Jesse Young
Jesse Young represents clients in serious employment disputes, such as severance negotiations, discrimination, retaliation, whistleblowing activity, employment contracts, terminations, and compliance. In addition, he has appeared in hundreds of wage-and-hour lawsuits and hundreds more arbitrations arising under the Fair Labor Standards Act and similar state laws.
