1. College sophomore, Suzy Smart, works part-time in the Handi Mart convenience store near campus. The store manager requires that each clerk arrives 15 minutes prior to the start of the shift so that the clerk going off-duty can review the sales figures and cash status with replacements before leaving. The clerk going off-duty punches the timecard after this review, but the incoming clerk is not allowed to punch in until the review is completed and they have agreed that the sales and cash figures are accurate. Sometimes, this exercise takes more than 15 minutes, and no matter how long it takes, the clerk coming on-duty may not punch the timecard and start earning wages until the process is completed.
Suzy, who completed a course on labor and employment law, realizes that the store manager is violating the FLSA by not allowing the incoming clerk to punch the time clock upon arrival. She brings this issue up with the store manager, who tells her that Handi Mart's parent corporation does not allow the store to compensate two clerks for the same period of time, no matter how brief, since this is classified by the corporation as a single coverage store. Furthermore, he adds ominously, if Suzy complains to the Wage and Hour Division of the DOL, he will probably be forced by the company to lay Suzy off, along with other part-timers, and cover the store himself for the evening shifts. He states, "You may get everyone a few dollars in back pay, but you'll also cost everybody their jobs. Remember, some of your co-workers are single parents who need this extra income to make ends meet."
Has the store manager violated FLSA? Explain? Explain how you would address this scenario as an HR professional.
2. In its heyday, Consolidated Electric was an industry leader in the wages and benefits that it paid its employees. Their pension plan was among the best in the business. Additionally, when employees retired, the company continued to pay their premiums for participation in the corporate health insurance plan. In recent years, health insurance premiums soared, while Consolidated's profits declined as a result of foreign competition and the need to make major investments in plant and equipment.
The Board is considering whether to discontinue health insurance benefits for retirees. The VP of Human Resources points out that many retirees depend on this company benefit and might not be financially capable of obtaining alternative insurance at their own expense. She argues that at the very least, the company is ethically obligated to continue benefits for current retirees. The CFO counters that Consolidated's first priority is its shareholders, who expect profits to be maximized.
Explain Consolidated's legal and/or ethical obligation to continue the health insurance benefits for retirees.