Pennsylvania Judge Rules that Health Services Facility Miscalculated Overtime Pay

A Pennsylvania state judge has ruled that Daikon Lutheran Social Ministries owes its employees over $670,000 in unpaid overtime in addition to prejudgment interest.  Plaintiff Catherine LeClair filed the class action complaint against Daikon, a provider of senior living and health services through its operation of nursing homes, residential facilities and outpatient treatment facilities.  The plaintiff was hired by Daikon as a certified nursing assistant.  She was paid an hourly wage and classified as non-exempt from the overtime pay provisions of the Pennsylvania Minimum Wage Act (“PMWA”).  The plaintiff claimed that Daikon’s method of calculating overtime premium pay violated the PMWA.

Under the PMWA, covered employees receive overtime premium pay for all hours worked over 40 hours in a workweek (defined as 7 consecutive days).  Plaintiff argued that Daikon violated the PMWA by paying her and others according to an “8/80 Rule” so that the employees were limited to overtime premium pay to hours worked in excess of 80 hours in a 14 day period or in excess of eight hours in one 24 hour day.  The PMWA was amended in July 2012 to provide certain health care employers with the opportunity to use the “8/80 Rule.”

Judge Michele A. Varricchio held that the words in the PMWA are clear and that the PMWA specifies that non-exempt employees should receive overtime pay for all hours worked over 40 in a 7 day workweek.  The court concluded that “Daikon’s use of the ‘8/80 Rule’ to calculate overtime premium pay violates the PMWA’s clear and unambiguous mandate that employees receive overtime premium pay whenever they work in excess of 40 hours during a seven-day workweek.”

Abbey Spanier, LLP, located in New York City, is a well-recognized national class action and complex litigation law firm.