Readers of our Greenbelt Employment Law Blog may remember our discussion in February of the technology industry's move to limit overtime pay. Of course, the federal Fair Labor Standards Act as well as state statutes protect the wage and overtime rights workers across the U.S. Nonetheless, there are numerous exceptions built into employment law that can make it quite confusing to determine which employees have the right to overtime pay.
Although the Federal Labor Standards Act has explicit exemptions for outside salespeople, sales representatives of GlaxoSmithKline have filed a class action lawsuit claiming that the company has failed to pay overtime. The salespeople argue that the company owes them for 10 to 20 hours of overtime that the workers put in each week. The workers reportedly worked overtime to visit doctors and promote pharmaceuticals.
In 2009, the Labor Department agreed with the former employees of the pharmaceutical company, explaining that the exemptions applied only when the overtime hours consummated in a sales transaction. The case is now heading to the Supreme Court.
Pharmaceutical companies have much at risk in this case, as the case leaves the entire industry with billions of dollars in potential liability. The company has argued that its sales representatives received a base salary in addition to performance-based commissions, and overtime requirements did not come into play.
In general, the Fair Labor Standards Act does require companies to pay hourly workers overtime. But there are numerous exemptions for various white-collar workers, including outside salesmen.
A ruling from the U.S. Supreme Court is due by the end of June.
Source: Reuters, "Supreme Court hears Glaxo overtime pay case," April 16, 2012