The US District Court in Massachusetts recently denied an employer’s motion to dismiss two state-law claims that were brought in conjunction with an employee’s claim of violation of the federal Fair Labor Standards Act (FLSA).   

The court found that the FLSA did not preempt the state law claims and that the FLSA did not provide an exclusive remedy because it did not address the employer’s alleged failure to pay the employee for time worked in weeks when she worked 40 hours or less. 

The employee worked for a travel agency and was properly classified as non-exempt under the FLSA, meaning that she was eligible for overtime pay for hours worked more than 40 in a workweek. The employee claimed that the employer had regularly failed to pay employees for hours worked and that the failure to account for those hours also led to unpaid overtime hours.

The employee brought three separate counts of violation: one under the FLSA for failure to pay overtime, and the other two counts under Massachusetts law for breach of contract and unjust enrichment.  All the employees had hourly wage contracts with the employer, which supported the breach of contract claim. 

The employer moved to dismiss the two state-law claims on the basis that the FLSA provides an exclusive remedy for violations.  However, the court determined that the plaintiff’s state-law claims were not covered by the FLSA because they related to the employer’s failure to pay straight-time (i.e., non-overtime) wages.  At issue was a certain amount of time each day that the employees spent on the job before clocking in, which was not accounted for in their pay, in violation of their contracts with the employer.  

The court determined that the state-law breach of contract and unjust enrichment claims did not duplicate the separate FLSA claim for non-payment of overtime.  The decision followed a precedent in which state-law claims were allowed to proceed on the basis that state-law claims would not be preempted unless they “stand as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.”  Unlike overtime pay, which is expressly regulated by the FLSA, claims for unpaid wages for straight-time work are subject to state law. 

The employee also sought to have all similarly situated employees of the employer certified as a class for the litigation.  The court granted a conditional certification of the class and sought more information about the affected group of employees. 

The case serves as a reminder to employers that they must account for all hours worked by employees.  The Massachusetts Wage Act (M.G.L. ch. 149, §148) and its regulations (454 CMR 27.00) indicate that working time “includes all time during which an employee is required to be on the employer’s premises or to be on duty, or to be at the prescribed work site or at any other location, and any time worked before or after the end of the normal shift to complete the work” (454 CMR 27.02).  Failure to compensate employees for time worked can result in violations of both state and federal law. 

Members with questions about wages or any other human resource matter may call the AIM HR Helpline at 800-470-6277.