One of the main issues in the case is Nordstrom employees working “off the clock”. The Fair Labor Standards Act (FLSA) mandates that employers keep accurate time records. It also establishes overtime pay requirements at one and one half times the regular pay for all hours over 40 hours per week. The case alleges that employees were told “not to punch the clock” when attending mandatory Saturday morning department meetings and often worked off the clock while performing many other work related activities, which is a direct violation of the aforementioned FLSA. One of the root causes of this issue is the Sales-per-Hour incentive compensation system Nordstom used. It implicitly encouraged employees to avoid recording all their hours in an effort to increase ones sales-per-hour. Employees with the highest sales-per-hour were given the most hours and best shifts. Those whose sales-per-hour were consistently low were at risk of losing their job. In both examples given in the case employees could earn more each week when reporting all their hours, but then their sales per hour would decrease. Nordstrom liked to encourage competition between employees by posting sales per hour statistics and honoring top sellers with discounts. With such a great emphasis on sales per hour, one could understand why employees would feel pressured to work off the clock. In an effort to avoid this issue going forward, Nordstrom should do a better job of differentiating between selling and non-selling activities and only track sales per hour statistics for hours spent on selling activities. They should also provide back-pay for employees that were not compensated for all hours worked in the past as suggested by the union and the state of Washington.
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