[US] Health network's overtime and holiday pay methods upheld by appeals court

In the US, a federal appeals court has backed a standard payroll method and given employers clarity on overtime and holiday pay, HRD reports. 

The Seventh Circuit ruled that Froedtert Health calculated overtime and holiday pay correctly for its hourly workers. The July 27 decision settles two technical pay questions which frequently challenge wage-and-hour teams. 

The case reportedly began with a sterile processing technician suing the Wisconsin health system Froedtert on behalf of a certified class. The dispute related to a workweek in April 2023 and centred on calculations rather than any claim of unpaid hours. 

The technician contended that the employer had used an incorrect overtime formula and wrongly left holiday premiums out of its pay calculations. A federal district court sided with the employer and dismissed the case, the technician subsequently appealed. 

The first dispute reportedly centered on overtime and shift differentials: extra pay that workers earn for less desirable hours. Froedtert had totaled a worker's weekly pay, divided by total hours to reach a "regular rate," then paid an extra half of that rate for each hour over 40, using the method the US Department of Labor endorses. 

The technician was requesting that overtime be calculated another way, separating the first 40 hours from overtime hours and applying a higher multiplier. 

The court rejected her approach, finding her method would pay two workers differently even when they logged identical hours, simply because of when in a week they worked shift-differential hours. 

According to the court, Froedtert's method remained consistent and still cleared the federal floor of one-and-a-half times regular pay. In addition, it noted that two other courts had already treated Froedtert's approach as compliant. 

The second issue was holiday pay. Froedtert excluded holiday premiums from the regular rate it used to compute overtime. The technician called that improper. The court reportedly disagreed, citing a specific exception for holiday premiums paid at time-and-a-half. It warned that folding holiday pay back in would create "pyramiding", an endless recalculation loop flagged by the Supreme Court decades ago. 

Wisconsin law did not change the outcome. The court read the state's wage rules to follow the federal standard. It declined to send the question to Wisconsin's highest court. 

Source: HRD

(Link via original reporting)

In the US, a federal appeals court has backed a standard payroll method and given employers clarity on overtime and holiday pay, HRD reports. 

The Seventh Circuit ruled that Froedtert Health calculated overtime and holiday pay correctly for its hourly workers. The July 27 decision settles two technical pay questions which frequently challenge wage-and-hour teams. 

The case reportedly began with a sterile processing technician suing the Wisconsin health system Froedtert on behalf of a certified class. The dispute related to a workweek in April 2023 and centred on calculations rather than any claim of unpaid hours. 

The technician contended that the employer had used an incorrect overtime formula and wrongly left holiday premiums out of its pay calculations. A federal district court sided with the employer and dismissed the case, the technician subsequently appealed. 

The first dispute reportedly centered on overtime and shift differentials: extra pay that workers earn for less desirable hours. Froedtert had totaled a worker's weekly pay, divided by total hours to reach a "regular rate," then paid an extra half of that rate for each hour over 40, using the method the US Department of Labor endorses. 

The technician was requesting that overtime be calculated another way, separating the first 40 hours from overtime hours and applying a higher multiplier. 

The court rejected her approach, finding her method would pay two workers differently even when they logged identical hours, simply because of when in a week they worked shift-differential hours. 

According to the court, Froedtert's method remained consistent and still cleared the federal floor of one-and-a-half times regular pay. In addition, it noted that two other courts had already treated Froedtert's approach as compliant. 

The second issue was holiday pay. Froedtert excluded holiday premiums from the regular rate it used to compute overtime. The technician called that improper. The court reportedly disagreed, citing a specific exception for holiday premiums paid at time-and-a-half. It warned that folding holiday pay back in would create "pyramiding", an endless recalculation loop flagged by the Supreme Court decades ago. 

Wisconsin law did not change the outcome. The court read the state's wage rules to follow the federal standard. It declined to send the question to Wisconsin's highest court. 

Source: HRD

(Link via original reporting)