Google, the renowned technology giant, recently faced a significant legal challenge surrounding the calculation of overtime pay. Following a class action lawsuit, a federal court has approved a settlement of approximately $8.4 million to address allegations of improper compensation practices.
The lawsuit, initiated in 2021, raised concerns about potential violations of the Fair Labor Standards Act (FLSA) and specific California state laws. It encompassed two main groups: California-based employees and those falling under the broader FLSA collective, including individuals from both within and outside California.
The core issue revolved around Google’s alleged failure to include commission and stock unit payments when determining the regular pay rate. This omission reportedly resulted in the incorrect calculation of overtime pay, as certain additional earnings were not factored into the regular hourly wages.
According to Nichols Kaster, one of the law firms representing the workers, these miscalculations benefited Google by potentially allowing the company to pay its hourly employees at rates below what was legally required.
This settlement is not the first time Google has faced such allegations. In 2018, the company, along with a recruitment agency, settled for approximately $5.5 million over claims of inadequate compensation for recruiters and sourcing experts. In that case, it was alleged that Google deliberately limited the hours recruiters could officially log, despite knowing that overtime was often necessary for their job responsibilities.
This recent settlement serves as a reminder for companies of all sizes to be diligent in their compensation practices. By ensuring fair and accurate compensation for employees, businesses not only comply with legal standards but also foster a positive and motivated workforce.
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