Court Opinion

ID: 8981350
Source: CourtListenerOpinion
Date Created: 2022-11-27 11:25:34.078645+00
Date Added: 2024-06-11T17:10:40.698563
License: Public Domain

PIERCE, Senior Circuit Judge,
dissenting:
As a threshold matter, this case involves a decision as to which regulation should inform a determination of the method by which an employee subject to the FLSA is paid. In concluding that the employees at issue herein are paid on an hourly basis, both the district court and the majority rely on the discussion of salaried employees found in 29 C.F.R. § 541.118(a). Because I believe that provision is inapplicable, I dissent.
Title 29 U.S.C. § 213(a)(1) provides that “any employee employed in a bona fide executive, administrative, or professional capacity” is exempt from the overtime provisions of the FLSA. Under 29 C.F.R. Part 541, whether an employee is employed in an executive, administrative, or professional capacity depends, in part, upon the amount of “salary” which (s)he receives. See id. at § 541.1(f) (“executive”); id. at § 541.2(e) (“administrative”); id. at § 541.3(e) (“professional”). Whether an employee is “paid ‘on a salary basis/ ” for the purposes of these provisions, is defined in 29 C.F.R. § 541.118. Cf. id. at § 541.212 (incorporating § 541.118’s definition of “salary” in context of administrative employees); id. at § 541.312 (incorporating § 541.118’s definition of “salary” in context of professional employees).
Section 541.118 appears to pertain only to whether an employee is employed in an executive, administrative, or professional capacity and thus is exempt from the FLSA’s overtime provisions. The statement at the beginning of § 541.118 — that “[a]n employee will be considered to be paid ‘on a salary basis’ within the meaning of the regulations ” — does not establish that that section’s definition of salary should be applied to the calculation of overtime compensation under 29 C.F.R. Part 778. Rather, in my view, § 541.118 is directed to the topic being addressed in Part 541, to wit: “Defining and Delimiting the Terms ‘Any Employee Employed in a Bona Fide Executive, AdministRative, or Professional Capacity ...’”.
Assuming that an employee is not employed in an executive, administrative, or professional capacity, I believe that one turns to § 778.107 et seq. to compute any overtime pay to which that employee is entitled. The absence of definitions in § 778.109, which sets forth several traditional methods of compensation, seems to support a “plain meaning” approach in defining the terms used therein. Under such an approach, the fact that the Port Authority’s employees are docked for tardiness is no more determinative of their method of pay than the fact that they do not punch a time clock. Merely because their compensation can be reduced to an hourly rate does not establish that these employees are “employed solely on the basis of a single hourly rate” as required under § 778.110. See 29 C.F.R. § 778.109 (1989).