Supreme Court May Have to Resolve Overtime Lawsuits

Federal overtime laws seem to be open to different interpretations depending on what court they are tried in.

Recent unpaid overtime lawsuits in various states have had contrasting outcomes as to whether or not certain employment positions are considered exempt from receiving overtime pay.

This has prompted legal experts to question whether the decision will ultimately have to be made by the Supreme Court.

Overtime Lawsuits

In a wage and hour lawsuit filed against J.P. Morgan Chase & Co. in the state of New York in 2011, the court ruled in favor of mortgage underwriters who alleged that they should be classified as non-exempt employees and therefore qualify for overtime wages.

The unpaid overtime lawsuit ruling convinced other banks to begin classifying mortgage underwriters as non-exempt and to pay out millions of dollars in order to settle similar cases.

However, a recent unpaid overtime lawsuit in California regarding whether mortgage underwriters were exempt or non-exempt employees ruled in favor of the bank citing that the Fair Labor Standards Act (FLSA) made mortgage underwriters exempt from receiving overtime pay.

A federal court ruling in Washington regarding mortgage underwriters determined that they should be considered non-exempt. While a similar wage and hour lawsuit originating from Ohio is currently in the appeals court.

Employment lawyers claim that it is likely the Supreme Court may have to resolve the matter since the rulings throughout federal courts are not consistent.

If the Supreme Court does take on the issue, the results could ripple into other currently exempt jobs including administrative, professional or executive positions which are ineligible for overtime pay under FLSA overtime rules.

FLSA Overtime Rules

The Fair Labor Standards Act was passed by U.S. Congress as a way to protect employees from potential exploitation by employers. The FLSA assures workers that they will be compensated for all hours worked by stating that “unless exempt, employees covered by the Act must receive overtime pay for hours worked over 40 in a workweek at a rate not less than time and one-half their regular rates of pay.”

Federal overtime regulations also guarantees that there is no limit on the number of hours an employee over the age of 16 may work in a given work week. However, the FLSA does not require overtime pay for weekends or holidays unless overtime is worked on those particular days.

Current non-exempt employees covered under the FLSA include workers who are full-time employees and earn less than $455 per week or $23,660 per year. Those who fall into this category are eligible for time and a half for all hours worked over 40 in a typical work week.

Under current Fair Labor Standards Act laws, some employees are not eligible for overtime wages including positions classified as administrative, professional or executive. This may change if the Supreme Court rules in favor of bank mortgage writers becoming non-exempt employees.

The U.S. Department of Labor has recently announced a proposed labor rule change that would raise the income threshold to $51,000 a year in order to give overtime wages to employees who make more than $23,000 but currently do not receiving any additional overtime pay.

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