Second Circuit rules on overtime for FLSA-exempt employees

Employees who are deemed exempt under the Fair Labor Standards Act (FLSA) are normally not entitled to overtime. In a recent case, the Second Circuit clarified longstanding confusion among the district courts over whether an FLSA-exempt employee was entitled to overtime compensation under the New York Labor Law (NYLL). This extremely troubling and important case is instructive regarding the interplay (and disconnect) between the FLSA and the NYLL on matters of overtime compensation.

Background

Travis Hayward and 28 other current and former employees of IBI Armored Services, Inc., an armored car service, sued the company, alleging it failed to pay the correct minimum wage, overtime, and spread of hours under the FLSA and the NYLL as well as provide proper wage notices or statements in violation of the NYLL's Wage Theft Prevention Act (WTPA).

Relying on the FLSA's motor carrier exemption, the district court partially granted IBI's request for summary judgment (dismissal without a trial). The employees appealed the dismissal of their overtime claim under the NYLL to the Second Circuit.

Analysis

Although the Second Circuit first considered this issue in 1986, confusion has since proliferated, with some district courts in New York holding that FLSA-exempt employees are ineligible for any overtime pay under the NYLL and other district courts holding that despite the motor carrier exemption, FLSA-exempt employees were still entitled to overtime pay under the NYLL.