Thursday, January 24, 2008

Hey, work is work!

The Bush administration tried to show that an employer in New York was in contempt of court in a case brought under the Fair Labor Standards Act (FSLA), which requires employers to pay their employees a minimum wage and also to pay for overtime. While the employer did continue to violate the FSLA, it was not in contempt of court because it was trying its best to apply unsettled law in this area. So says the Court of Appeals in Chao v. Gotham Registry, decided on January 24.

In resolving "the novel question . . . whether employees must be paid overtime wages for work that their employer has prohibited and does not desire," the Second Circuit held as follows:

1. Even unauthorized overtime work counts under the FSLA. That is, if the employees decide to work overtime, the employer has to pay them overtime rates under the broad interpretation of that statute which, Judge Cardamone explains in typically readable language, Congress enacted during the Great Depression to help the working man and alleviate excessive working hours. Although "Gotham argues it neither benefits from nor controls the nurses' unauthorized overtime and, accordingly, such time does not constitute work," the Circuit court found otherwise, concluding "Whether a nurse is working a morning, afternoon or night shift in emergency care, an operating room, or on a hospital floor, the overtime hours are indistinguishable from the straight-time hours. Such work from the nurses' standpoint is fungible. Work is work, after all. Nurses who work overtime, at the hospitals' request, often continue doing the same kind of work they were doing on their regular shifts."

2. The Court also rejected Gotham's implied argument that overtime work that does not benefit the employer financially doesn't count under FLSA. That position would create untenable results, the Second Circuit reasoned, "an employer would be permitted to avoid the Act whenever the overtime provisions threaten success in achieving Congress' goal of curtailing overtime by bringing its cost above its benefit to the employer."

3. The employer also can't avoid compliance with FLSA by arguing that it only learned after the fact that employees worked overtime. "We have never suggested that an employer's knowledge need arise concurrently with the performance of overtime, for good reason. The Act's overtime provisions apply to work performed off premises, outside of the employer's view and sometimes at odd hours, where an employer's concurrent knowledge of an employee's labor is not the norm." The solution to this dilemma is to simply tell the employees not to work any further overtime. The fact that Gotham is an employment agency that staffs hospitals does not give that employer an excuse to enforce its no-overtime rules.

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