The recent settlement of two overtime class actions against Pennsylvania healthcare providers highlights an important issue for all employers - the need to comply with both the federal Fair Labor Standards Act ("FLSA") and state wage and hour laws. Both the FLSA and the Pennsylvania Minimum Wage Act ("PMWA") require employers to pay overtime compensation to employees who work more than 40 hours in a seven-day workweek. However, the FLSA provides an exception to this rule, permitting hospitals, nursing homes, and other healthcare facilities to adopt an alternative "8 and 80" period, whereby employees only receive overtime compensation if they work more than eight hours in a single day or more than 80 hours in a two-week period.
State law, however, does not necessarily permit the same kind of exception. Last year, the Philadelphia Court of Common Pleas held, in Turner v. Mercy Health System and Vanston v. Maxis Health System, that the use of an "8 and 80" period violated the PMWA. The Court explained that the PMWA, unlike the FLSA, does not provide healthcare facilities with an exception to the standard 40-hour workweek overtime rule, and the FLSA does not expressly preempt state minimum wage laws from providing greater employee protections than the federal statute. More recently, the Turner and Vanston defendants settled the plaintiffs' claims for $2.75 million. The Turner andVanston settlements will likely lead to a significant increase in wage and hour litigation against other healthcare facilities in Pennsylvania that use the "8 and 80" rule. All employers, both healthcare and otherwise, should review their wage and hour practices regularly to ensure compliance with both the FLSA and applicable state laws.
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