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Federal appeals court rules on FLSA professional exemption

The Fair Labor Standards Act requires employers in California and around the country to pay their workers overtime when they work more than 40 hours during a workweek, but employees who perform bona fide administrative, executive or professional duties are not covered by the landmark 1938 federal law. The statute does not clearly define what makes a position a white-collar job, and the courts have generally ruled that workers are covered by the FLSA unless their duties plainly and unmistakably fall within the exemption.

A recent case dealing with this issue involved two welding inspectors who filed a class-action claim against their employer after being denied overtime pay while working on a pipeline project in Ohio in 2013 and 2014. The Texas-based construction management company involved maintained that the plaintiffs performed executive duties and were therefore not covered by the FLSA, and these arguments convinced a district court judge to dismiss the case.

However, the welding inspectors appealed the decision to the U.S. Court of Appeals for the Sixth Circuit, and a panel of three federal judges reversed the lower court's decision on Dec. 19. The welding inspectors conceded that their compensation of more than $100,000 per year was consistent with an executive position, but they argued that simply earning a high income was not enough to exempt them from the protections provided by the FLSA. The appeals court agreed, and the case has now been remanded for further litigation.

Attorneys with experience in employee rights cases typically pay close attention to judicial decisions that deal with labor law provisions that are subject to interpretation. They might use recent court rulings to urge employers to avoid lengthy and costly trials by settling these matters quickly. Attorneys may also remind employers that losing in court may prompt other workers to file similar claims.

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