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February 04, 2005
Wal-Mart Wins Appeal in OT Suit

Wal-Mart Stores Inc. won a new hearing in a case in which pharmacists allege they are entitled to overtime pay because the retail giant treated them as hourly employees by adjusting their salaries based on workload, the Associated Press reports.

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The 10th U.S. Circuit Court of Appeals ordered a federal judge, who granted summary judgment to the plaintiffs, to review the case again, saying the plaintiffs never established incontrovertibly that the company changed their pay so frequently that it amounted to hourly pay, the news service notes.

The appeals court ruled that the Department of Labor has said, in the form of opinion letters, that employers can make "occasional prospective salary reductions before the affected pay period in response to business needs" without violating the salary-basis test for exemption from overtime. "If, however, the salary changes are so frequent as to make the salary the functional equivalent of an hourly wage, we will treat the 'salary; as a sham and deny the employer the FLSA exemption for professional employees," the court ruled.

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