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Overtime calculation method approved.

EMPLOYERS WHO MISCLASSIFY EMPLOYEES as exempt can pay the overtime premium of 50 percent for overtime hours worked rather than the standard oneand-a-half time pay rate, the 4th Circuit ruled Jan. 14 in Desmond v. PNGI Charles Town Gaming.

In Desmond, PNGI Charles Town Gaming (PNGI) was sued by three employees it had misclassified as exempt. The employees sought overtime back wages under the Fair Labor Standards Act. Although the parties agreed upon the hours each plaintiff worked, they disagreed about how to calculate the unpaid overtime. The employees argued that they should be paid 150 percent of their pay rate for all overtime hours worked, but PNGI insisted that, because the employees agreed their salaries were meant to cover all hours worked, the "straight time" was covered, and they were owed only an additional 50 percent of their pay rate for each hour of overtime.

On appeal, the 4th Circuit upheld the district judge's ruling in favor of PGNI. Several circuits and the Department of Labor have endorsed the 50 percent premium for overtime pay in cases of mistaken employee classification.
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Title Annotation:4TH CIRCUIT
Author:Roberts, Kayleigh
Date:Mar 31, 2011
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