Tuesday, October 11, 2016

3d Cir: Paid lunches cannot offset unpaid overtime

Last Friday, the Third Circuit Court of Appeals issued a precedential employment law decision in Smiley v. E.I. Dupont de Nemours & Co.

Not official use.
A group of employees claimed their employer did not pay them overtime for time they spent "donning and doffing" their uniforms and protective gear (yes, for my non-attorney readers, that's seriously what we call it, "donning and doffing" - "putting on and taking off" reeks of layperson speak, ya know?). That's an FLSA violation.

The employer, however, paid the employees for lunch breaks even though the FLSA does not require compensation for meal breaks. The employer wanted to use that compensation to offset any overtime pay they owed to their employees for the donning and doffing. That makes sense, right? The employer paid them too little for overtime, but it paid them too much for meal breaks... let's just balance it out.

How did the Court rule?
Nothing in the FLSA authorizes the type of offsetting DuPont advances here, where an employer seeks to credit compensation that it included in calculating an employee’s regular rate of pay against its overtime liability.
Employer loses. This is a plausible reading of the FLSA but it seems to defy common sense. Then again, sometimes I think the FLSA and common sense may be mutually exclusive.

The Court (and the FLSA) did note that certain "extra compensation" can serve as an offset. Specifically, certain "premium rates" paid to employees who work certain shifts.