Highly paid workers may be entitled to overtime under FLSA

Two welding inspectors who earned more than $100,000 a year on an annualized basis may nevertheless be entitled to overtime pay under the Fair Labor Standards Act, says a federal appeals court, in overturning a lower court ruling.

Tom Hughes and Desmond McDonald worked as welding inspectors for Houston-based Gulf Interstate Field Services Inc. on a pipeline construction project in Ohio between 2013 and 2014, according to Tuesday’s ruling by the 6th U.S. Circuit Court of Appeals in Cincinnati in Tom Hughes and Desmond McDonald, on behalf of themselves and others similarly situated, v. Gulf Interstate Field Services Inc.

They filed suit in U.S. District Court in Columbus, Ohio, in a putative class action suit under the Fair Labor Standard Act and state law stating they were entitled to overtime pay for the weeks in which they worked more than 40 hours.

Gulf Interstate argued they were exempt from having to be paid overtime under the FLSA’s overtime exemption for employees “employed in a bona fide executive, administrative or professional capacity.” The District Court granted Gulf summary judgment dismissing the case.

This was unanimously overturned by a three-judge appeals court panel in Monday’s ruling. “Though Hughes and McDonald conceded that they were paid in a manner and a rate consistent with being exempt, they argue that these facts do not resolve the question under the test of the regulation,” said the ruling, in reversing the lower court ruling and remanding the case for further proceedings.

The ruling states, “It may seem strange, on its face, that employees who earned an annualized rate of more than $100,000 did not necessarily qualify as ‘highly compensated employees.’ But regardless of whether good reasons exist, we must follow the legal meaning of the terms rather than the intuitive sense of the meaning of the words.”

In an issue that has created a split among federal appeals courts, the 9th U.S. Circuit Court of Appeals in San Francisco overturned a lower court ruling in July and held that mortgage underwriters are entitled to overtime.