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August 16, 2021

Giant bonuses 'shortchanged' thousands of workers in overtime pay during pandemic, U.S. Department of Labor says

The company has paid roughly $165,000 in back wages to hourly workers, according to spokesperson

Investigations Labor
Giant Overtime Back Wages Courtesy/The Giant Company

The Giant Company's COVID-related bonuses were not factored into the calculation of overtime pay for more than 3,000 employees in four states, leading to about $165,000 in back wages owed to employees, the U.S. Department of Labor said.

Pennsylvania-based supermarket chain Giant miscalculated overtime pay rates for more than 3,330 employees in four states during the coronavirus pandemic, resulting in more than $165,000 in back wages owed to hourly workers, the U.S. Department of Labor announced Monday.

Giant, based in Carlisle, Cumberland County, also operates markets under the Foodsource and Martin's brand names. The employees impacted by the miscalculation worked at 192 different stores in Pennsylvania, Virginia, West Virginia and Maryland.

Investigators with the Labor Department's Wage & Hour Division said the problem stemmed from a change in policy during the early months of the pandemic.

In March 2020, Giant increased the hourly rates of its workers by $2 per hour during the peak of the U.S. lockdowns. The pay increase continued until May 2020, a roughly two-month period during which Giant accurately calculated overtime pay for these workers.

In May of last year, Giant decreased the hourly pay rate by $2 per hour and instead opted to pay workers lump sum bonuses instead. Giant paid the lump sum bonuses in June 2020, October 2020 and February 2021.

"When they did, they failed to include those bonus amounts in workers’ regular rates when calculating overtime pay due, resulting in violations of the Fair Labor Standards Act," the Labor Department said Monday. "Excluding bonus amounts from the calculation resulted in Giant paying overtime at rates lower than those the law requires."

The investigation led to the division’s recovery of $165,653 in back wages for 3,314 workers, the Labor Department said.

"Grocery workers are among our lowest-paid essential workers, and deserve to take home every penny of the wages they earn," said Al Gristina, director of the Wage and Hour Division's Wilkes-Barre District Office. "Shifting pay from the hourly rate to a bonus does not mean the employer can exclude it when calculating overtime. The Wage and Hour Division offers extensive educational materials to employers so that they understand their responsibilities clearly, and we invite them to contact us directly with any questions they may have."

Giant spokesperson Ashley Flower said the company's miscalculation was not intentional. She said Giant voluntarily resolved the overtime payment for COVID-related bonuses with its employees. 

"The pandemic affirmed what we’ve long known: our team members are our greatest resource," Flower said. "We were among the first in our region to provide Appreciation Pay, as well as an Appreciation Bonus, for all team members in our stores and distribution centers, in recognition of the incredible service they provided to our customers during an unprecedented time. To be clear, there was no formal complaint by the U.S. Department of Labor against The Giant Company at any time."

Giant has been in the midst of an expansion in Philadelphia, adding a mix of small-format Heirloom Markets and signing on to large development projects that are underway at locations across the city. The company opened a flagship, two-level grocery store at Logan Square earlier this year.