The federal Fair Labor Standards Act covers three employer pay practices: Minimum wage, overtime pay, and child labor. Last week, the Third Circuit Court of Appeals concluded that employees cannot bring FLSA claims for unpaid wages outside of these three requirements. In USDOL v. Comprehensive Healthcare Management Services LLC, the Department of Labor sued the employer, alleging a range of improper pay practices. Among these claims, the DOL alleged that employees were not being accurately paid for their first 40 hours of employment in each workweek, even if they received overtime pay for additional hours worked.

The district court found for the plaintiffs on this "overtime gap," awarding back pay and damages. On appeal, the employer challenged the ability to include overtime gap claims under the FLSA. The Third Circuit agreed, concluding that if the employee received minimum wage and overtime for hours worked, the FLSA does not allow recovery for unpaid, non-premium hours.  

This decision is consistent with a recent opinion from the Second Circuit, but reaches the opposite conclusion from the Fourth Circuit (which includes North Carolina, South Carolina, and Virginia). This circuit split means that depending on where the employee works, overtime gap claims may or may not be actionable in federal court under the FLSA. Most state wage payment laws provide relief for unpaid, non-premium hours. Absent a resolution of the circuit split by the U.S. Supreme Court, employees in some states are currently limited to pursuing those state law claims.

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