By James Denis
Nov. 11, 2009
Louise Parth, an emergency room nurse at Pomona Valley Hospital Medical Center in Pomona, California, filed a class-action lawsuit against the hospital alleging that its alternative pay scheme to compensate nurses working four 12-hour shifts a week violated the overtime pay requirements of the Fair Labor Standards Act. Employees who agreed to work the 12-hour-per-day, four-day workweek received a lower base hourly rate (which exceeded the legal minimum wage) in exchange for the 12-hour schedule. Parth agreed to participate in the plan in 1993, and as a result her base hourly rate was reduced, from $22.93 to $19.57 an hour.
Under normal circumstances, the FLSA requires an employer to pay nonexempt employees who work more than 40 hours in a workweek one and a half times the employees’ “regular rate” of pay. In hospitals and health care facilities, however, there is an additional overtime requirement that employers pay time and a half for hours worked in excess of eight hours in any workday. [See: 29 U.S.C. § 207(j).]
The U.S. District Court dismissed the action on the grounds that the hospital’s pay plan did not violate the FLSA, and on appeal to the U.S. Court of Appeals for the 9th Circuit, that decision was affirmed. The 9th Circuit agreed that nothing in the FLSA “bars an employer from contracting with his employees to pay them the same wages they received previously, so long as the new rate equals or exceeds the minimum required by the [FLSA].” The court also found no evidence that the altered compensation schedule was adopted for the purpose of avoiding overtime payments. Parth v. Pomona Valley Hospital Medical Center, No. 08-55022 (10/22/09).
Impact: Employers may implement an alternative pay schedule so long as employees continue to earn approximately the same salary at an hourly rate that meets or exceeds the minimum requirements of the FLSA.
The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.
We build robust scheduling & attendance software for businesses with 500+ frontline workers. With custom BI reporting and demand-driven scheduling, we help our customers reduce labor spend and increase profitability across their business. It's as simple as that.
Employee Engagement12 practical employee appreciation ideas for better engagement and retention
Summary Showing appreciation to your employees improves engagement and retention. There are 12 practica...
employee appreciation, engagement, HR, raccoons
ComplianceCalifornia fast food workers bill: why it’s more than meets the eye and how to prepare
Summary: California signs bill establishing a “fast food council” that has the power to raise the indus...
Employee Engagement7 statistics on employee turnover in 2022 every HR manager should be aware of
Summary July 2022 saw 5.9 million total separations – More Replacing a full-time employee can cost up t...
employee retention, employee turnover