The Kindle may be sky-high on customers' wish lists for Christmas, but the holiday season has presented Amazon (AMZN) with a headache: a potential class-action lawsuit, filed the day before Thanksgiving by a former worker at one of its Nevada warehouses, charging that the online retailer has shorted its 21,000 workers on overtime pay.
According to the suit [PDF], Richard Austin, an employee of the company's distribution center in Fernley, Nevada, from September 2008 through last August, charges that Amazon regularly rounded shift start- and end-times to the nearest quarter-hour -- costing workers up to 15 minutes of overtime pay daily, even when the company required workers to work that extra time.
Seven Minutes or Less
The shift contends that for an Amazon employee who clocked in seven minutes or less before the scheduled start time -- or, conversely, clocked out seven minutes or less after the shift was scheduled to end -- "Amazon.com would treat the employee's time as though he/she clocked in [or out] at their scheduled start time and consequently would not compensate the employee for the preliminary time prior to their scheduled start [or end] time."
Austin's legal team -- made up of attorneys in Seattle; San Diego; Reno, Nevada; and Long Beach, California -- also alleges that Amazon.com shortchanged warehouse staffers in Arizona, Delaware, Indiana, Kansas, Kentucky, Pennsylvania, Texas, and Virginia, The Las Vegas Sun reported this week.
Department of Labor policy on overtime lets companies round up or down on overtime pay, as long as the practice does not lead to "failure to compensate the employees properly for all the time they have actually worked."
'No Need For This'
That point has stuck in the craw of many a company in recent years: Wal-Mart (WMT) settled a class-action suit in 2007 that required it to pay back almost $34 million in employee overtime pay. A 2008 lawsuit against Station Casinos on unfair overtime practices for its 20,000 employees is still pending. And other companies such as Electronic Arts (ERTS), Carnival Corp.'s (CCL) Carnival Cruise Lines, Cingular Wireless, and Office Depot (ODP) have been ordered to pay settlements ranging from $6.25 million to $15.6 million.
Requests for comment from Amazon and Austin's legal representation were not answered, but Austin's Nevada attorney, Mark Thierman, told Law.com that the retailer should "know better" than to cut corners on overtime pay: "You're in the technology business. Use it. You can do this to the second. There's no need for this. These people punch in on an electronic clock."
Want to succeed? Then you need goals!View Course »