Patrick Miller-Bartley
Wed., Sept. 18, 2024
Last week, the Ninth Circuit Court of Appeals allowed over three-hundred nurses to bring overtime claims against their employer, reversing a trial court’s ruling that the nurses were exempt from the Fair Labor Standards Act (“FLSA”), the federal minimum wage and overtime law.
The FLSA requires that employers pay overtime – time and one-half – when workers work more than forty (40) hours in a week. There are some exceptions to this requirement, including for salaried workers. However, workers must actually receive a salary, and if their pay is reduced when they work fewer hours, they may not qualify.
The nurses worked for the City and County of San Francisco, California, in hospitals, jails, and clinics. Because there was evidence that their employer reduced the nurses’ pay when they worked fewer than their regularly-scheduled hours in a given week, the court held that San Francisco could not show that the nurses were, in fact, salaried employees, and that their claims could proceed.
The City claimed that the plaintiff nurses were exempt from the FLSA, and thus not eligible for overtime. In order to qualify for the exemption at issue, the nurses needed to be paid “on a salary basis,” and perform certain exempt duties. The employer argued that the nurses were paid on a salary basis because their pay was determined and expressed on an annual basis, and because these annual amounts were included in employment agreements.
The nurses, however, provided some evidence showing that these annual amounts were used to calculate an hourly rate of pay, and, on certain occasions where nurses had worked fewer than their regularly-scheduled number of hours in a particular week, their pay was reduced by a commensurate number of hours. According to the court, in determining whether an employee is paid on a salary basis, it does not matter how the employee’s pay is characterized; what matters is how the employee is actually paid. Because the nurses’ pay fluctuated with the number of hours they worked, they did not receive a “predetermined amount of compensation,” and thus were not actually salaried employees.
At the end of the day, what matters is how an employee is actually paid, not how their employer claims they are paid. If you believe your employer might have wrongly classified you as overtime-exempt, or if you are experiencing a labor law violation similar to the one involved in this lawsuit, do not hesitate to contact us and speak with one of our experienced wage and hour attorneys today. We can help you understand your rights and options.
