It’s that time of year when I update my FMLA/Wage and Hour treatise (available as a part of the Lexis/Nexis Labor and Employment Law set). I am still surprised by stuff I learn for the first time when I do this. For example, I had never thought about something called “gap time.” So, maybe it’s something new (and possibly of interest) to you as well.
The FLSA requires employers to pay non-exempt employees both a minimum wage and overtime. It also requires that employers pay not less than time and a half for each hour worked over forty hours in a workweek. But there are circumstances that fall between these two well established requirements for which no easy answer exists.
Employees who seek to recover wages of this sort pursue a claim for “gap time,” something no provision of the FLSA governs. There are two types of gap time – pure gap time and overtime gap time. Pure gap time claims seek to recover for unpaid straight time in a week in which an employee worked no overtime. It is universally agreed there is no cause of action under the FLSA for pure gap time when there is no evidence of a minimum wage or maximum hour violation by the employer. That may be an issue of contract or state wage law.
Overtime gap time, on the other hand, involves a claim where the employee seeks to recover unpaid straight time for a week in which they did work overtime. How can that come about? Typically, it involves an agreement in which the employer pays an employee a lower hourly rate (while still above minimum wage) during those weeks the employee works overtime.
Put most simply, and by way of example, assume that if an employee works 40 hours or less in a workweek, the employee earns $18.00/hour; but an agreement or policy provides that in a week when the employee works, say, 60 hours (20 hours of overtime), the employee’s base rate drops to $14.00/hour. The result is significant: if the base rate can be legally changed, the employee would earn $280 less in that week than if the rate cannot be legally changed ($980 verses $1260).
The Fourth Circuit addressed the issue of overtime gap time in Conner v. Cleveland County, 22 F.4th 412 (4th Cir. 2022). Conner worked as an emergency medical services (EMS) employee on a 21-day repeating schedule where an employee works a 24-hour shift followed by 48 hours off. An employee working a “24 on/48 off” schedule would always work more than 40 hours per week, since they will have at least two (and sometimes three) 24-hour shifts each week.
The County’s Operating Guideline and Pay Plan (which Conner alleged was an “agreement”) provided for a “revised semi-monthly rate” for calculating regular wages as follows: multiply the hourly rate used to calculate overtime by 2,080 (representing 40 non-overtime hours per week worked for 52 weeks), and then divide this number by 24. The resulting number was the employee’s pay for the pay period.
Conner alleged that the “revised semi-monthly rate” unlawfully paid her regular wages using overtime compensation, resulting in significantly lower pay of over $10,000 over the course of a year.
The district court dismissed the claim, relying on a 1996 Fourth Circuit decision. Conner appealed. The Fourth Circuit reversed, finding that the district court had misread its prior decision. The court then turned to the standard for determining whether a plaintiff has pled sufficient factual allegations to overcome a Rule 12(b)(6) motion to dismiss. “To do so,” said the court, “the facts in the complaint must support a reasonable inference that: (1) the employee worked overtime in at least one week; and (2) the employee was not paid all straight-time wages due under the employment agreement or applicable statute.” Holding that Conner had met those obligations here, the court demanded the case to the district court.
One follow-up here: There is now a Circuit split on whether overtime gap time cases are viable under the FLSA, with the Fourth Circuit recognizing the claim and the Second Circuit refusing to do so. Cleveland County has filed a petition for a writ of certiorari and the matter is now sitting quietly while we wait to see if the Supreme Court wants to hear the case.