Home Depot Settlement Highlights Industry Labor Pitfalls - Modern Distribution Management

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Home Depot Settlement Highlights Industry Labor Pitfalls

The home improvement retailer recently agreed to pay more than $72M to workers who were denied wages while they were ‘standing around.’
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“I’m not paying you to stand around.”

If you’ve ever worked in almost any employment setting, that’s probably a phrase you’ve heard a time or two. The theory being, I suppose, that there is always something to do during your shift, even when things get slow. There’s always a floor sweep, or boxes to stack, or whatever may apply to one’s role.

A new settlement between retail giant The Home Depot and thousands of former employees reveals that, actually, you can — and perhaps legally should — get paid to stand around on the job.

A new report from business publication Inc. recounts how The Home Depot recently settled a class action suit in California that impacted more than 270,000 employees to the tune of $72.5 million.

And while a settlement doesn’t carry the same legal precedent a court decision would have, the piece’s author, Suzanne Lucas, writes that employers should still pay attention.

After legal fees and other related costs, half of the settlement goes to pay Home Depot store employees who “stood around,” according to the settlement. As soon as the closing shift concluded, they clocked out, but had to wait for their release from the building.

The employees eventually got paid, Lucas writes, because the crux of the lawsuit was how Home Depot controlled the workers’ time and movement, even if they had clocked out.

“Because the employees couldn’t leave the building and were waiting for the employer’s benefit, it makes sense that they should be paid,” she writes. “If your employee clocks out and then hangs out not working but could leave at any time, that would be a different situation. But in this case, they couldn’t leave. Home Depot controlled their time.”

Another 41% of the settlement amount will go to paying workers who were not paid for the time it took to put on and take off their aprons, according to the settlement. And while workers are often paid for a practice known as donning and doffing — usually putting safety equipment or other PPE on at the start of a shift — this practice usually doesn’t cover something like throwing or taking off an apron, Lucas points out.

However, because the case was filed in California — a state with stricter than average regulations regarding compensable time — this was a class-action setting that may be unique to the Golden State.

Not to sound like a broken record, but, as Lucas notes, all employees should keep an eye on cases like these.

“Even if the plaintiffs couldn’t have prevailed in court, you should consider what you require your employees to do off the clock,” she writes. “You may think it’s not a big deal to not pay them for putting on aprons and such, but if it’s not a big deal, then it’s not a big deal for you to pay them for it. You’ll never get in legal trouble for paying people to put on their aprons.”

According to the settlement, the final 9% will go to workers who lost pay because of “rounding.” Employers can legally round time to make calculating income easier, but it has to balance out in the end. The rounding can’t always go in the employer’s favor, even though the Fair Labor Standard Act allows the process of rounding to begin with, Lucas writes.

“How you pay your employees matters,” she writes. “Little things like this can add up, but remember that paying people as they go is much cheaper than paying legal fees. Remember that $72.5 million doesn’t include what Home Depot paid its attorneys to reach this settlement.”

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