Third Circuit Rejects “Overtime Gap Time” Claims Under FLSA
At a Glance The Third Circuit held that the Fair Labor Standards Act (FLSA) does not allow recovery of “overtime gap time.” The court squarely rejected the DOL’s position that employees must be paid their “regular rate” for all hours worked before overtime is calculated. The court declined to defer to longstanding DOL guidance, finding it unpersuasive and unsupported by the statute’s text. As a result, unpaid straight-time wage claims are pushed into state law and contract theories, not the FLSA. In a significant development for employers in the Third Circuit, the U.S. Court of Appeals for the Third Circuit recently held that the FLSA does not permit recovery of “overtime gap time” wages. While the decision limits the scope of federal wage-and-hour liability in the Third Circuit, it leaves open the possibility of state law and contract remedies. Background The case arose from a U.S. Department of Labor (DOL) enforcement action against a group of healthcare facil...