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$18-Million UPS Salary Settlement Disclosed

Part-time supervisors were given no compensation for extra hours. Hundreds of firms have agreed to pay in similar cases.

October 23, 2002|Lisa Girion | Times Staff Writer

Nearly 6,000 people who worked as part-time supervisors at United Parcel Service Inc. in California are entitled to a share of an $18-million settlement announced Tuesday in a suit alleging that UPS violated the state's wage-and-hour laws.

The settlement covers UPS supervisors who were scheduled to work 25 hours a week, earning average monthly salaries of $1,500, said Kyle Van Dyke, a San Diego lawyer who represented the plaintiffs. The supervisors, he said, had received no additional pay for working more than their scheduled hours, nor did they receive overtime pay for working more than eight hours a day or 40 hours a week.

Peggy Gardner, a spokeswoman for UPS, said the company changed its pay practices in California on Sept. 1 to comply with a revision of California's wage-and-hour laws that took effect in January 2000. UPS had been looking into how it would comply with the revision when the lawsuit was filed in May 2000, Gardner said.

Hundreds of other local and national companies have made substantial payments to settle similar lawsuits filed on behalf of white-collar workers alleging violations of California's unique labor laws. The UPS case is believed to be the first settlement of a case filed on behalf of part-time supervisors.

Although settlements have no precedent-setting value, it could open the door for new suits filed for alleged violations of the salary minimum requirement, said Debra Hurst, another lawyer for the plaintiffs.

"Now California employers are going to have to treat part-time employees the same as full-time employees," Hurst said.

The UPS suit alleged that the part-time supervisors did not earn enough to be exempt from the state requirement that they be paid an overtime premium of time and a half after eight hours a day. According to the wage-and-hour code revision in 2000, anyone earning less than $1,993 a month in California could not be exempt from the overtime requirement. That minimum salary has since been raised to $2,340.

To comply, UPS, among other things, now requires supervisors and specialists who work part time in California to record the time they begin and end each shift, Gardner said.

"We have never asked our managers to essentially clock in and clock out, so we didn't track their hours minute by minute," she said. "It's too early to tell if this system will be adopted anywhere else."

The settlement was approved Aug. 1 but a confidentiality agreement prevented disclosure before September.

Van Dyke and Hurst said they decided to announce the settlement on Tuesday because the Dec. 3 deadline for claims to be submitted was approaching. The lawyers said they hoped the publicity would encourage more former California supervisors to avail themselves of the settlement.

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