Takeaway: This ruling is significant for employers in the 3rd Circuit. In addition to shutting down the possibility of overtime gap time claims within its jurisdiction, the court clarified that employers’ burden of proof in establishing an employee’s exempt status is less onerous than previously thought. However, the growing split among circuits on the issue of overtime gap claims poses obstacles for multistate corporations, which must deal with conflicting precedent in various circuits in addition to differing state fair labor laws. Employers should closely examine their practices to ensure accurate recordkeeping, calculation of the regular rate of pay, and payment for all hours worked.
The Fair Labor Standards Act (FLSA) does not provide a remedy for employees to recover “overtime gap time,” or unpaid straight-time hours worked in a week where the employee also logged overtime hours, the 3rd U.S. Circuit Court of Appeals held. This decision, a significant development for employers, expands an existing split among federal appellate courts, with the 4th Circuit holding overtime gap-time claims are viable under the FLSA and the 2nd and 3rd Circuits rejecting such claims.
Toolkit: Smart Strategies for Overtime Management
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