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Appeals Court Rules Per Diem Not Part of Overtime Pay Calculations

NEW YORK — The Tenth Circuit Court of Appeals recently ruled that employers do not have to factor in per diem payments when calculating how much to pay employees for overtime hours. The ruling comes in a class action unpaid overtime lawsuit filed by a group of employees for a French-based seismic mapping company arguing that the per diem dispersed while away on business should be counted as income and therefore subject to inclusion in overtime payments.

According to the suit, plaintiffs routinely spent time on remote work sites often putting in over 40 hours per week, for which they were compensated at one and a half times their regular hourly rate. In addition to their premium pay for overtime, the defendant furnished these workers with $35 for meals while working away from home, an amount the employer claims the plaintiffs agreed to be fair reimbursement for meals.

While the plaintiffs argued to the contrary, the Appeals Court hearing the case concluded the employer was within its rights to withhold the meal per diems from overtime pay calculations. Under the Fair Labor Standards Act (FLSA), overtime payments must be based on all “remuneration” given to employees but does include exceptions for living expenses while away from home.

Although the plaintiffs’ attorneys went to great lengths to prove otherwise, the court interpreted food to be part of legitimate living expenses that employers may disregard from overtime pay calculations and therefore compliant with the law. Other exceptions to the FLSA include gifts, vacation pay, retirement plans, discretionary bonuses, premium pay for holidays and weekends, stocks and dividends, or premium pay agreed to in collective bargaining agreements.

Often times, employees assume their employers follow all state and federal wage laws when in fact these workers are the victims of systematic wage theft. Employees who suspect they may be underpaid should contact an experienced unpaid overtime lawyer to discuss their case and find out what compensation they may be entitled to.

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Call (855) 754-2795 or complete the Free Unpaid Overtime Case Review form on the top right of this page if you feel that your wage rights are being violated under the FLSA. Our top-rated team of unpaid wage lawyers will evaluate your situation to determine your best course of action to help you seek justice and get the compensation you deserve.

Our office will also determine if it is in your best interest to file a lawsuit against your employer. Because strict time limitations apply for filing these types of claims, we advise you contact our experienced unpaid overtime wage attorneys at your earliest convenience and preserve your legal rights.

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