Second Circuit Holds The Fair Labor Standards Act Does Not Provide For Gap Time Claims So Long As Minimum Wage Is Paid

A gap-time claim is one in which an employee has not worked 40 hours in a given week but seeks recovery of unpaid time worked, or in which an employee has worked over 40 hours in a given week but seeks recovery for unpaid work under 40 hours. An employee who has not worked overtime has no claim under FLSA for hours worked below the 40-hour overtime threshold, unless the average hourly wage falls below the federal minimum wage.

The viability of gap time claims under the FLSA had not yet been settled in the Second Circuit. In Dennis Lundy et al. v. Catholic Health System of Long Island Inc. et al., case number 12-1453, where a putative class sought recovery of overtime and gap time wages, the Second Circuit explicitly held: "So long as an employee is being paid the minimum wage or more, FLSA does not provide recourse for unpaid hours below the 40-hour threshold, even if the employee also works overtime hours the same week [or said another way, '[the] FLSA does not provide for a gap-time claim even when an employee has worked overtime.'" The reasoning is simple: "... the text of FLSA requires only payment of minimum wages and overtime wages. See 29 U.S.C. §§ 201-19. It simply does not consider or afford a recovery for gap-time hours."

The Second Circuit's holding is contrary to the Fourth Circuit's holding in Monahan v. Cnty. Of Chesterfield, 95 F.3d 1263, 1280 (4th Cir. 1996) which held that the FLSA permits gap time claims to a limited extent (the Fourth Circuit relied on DOL interpretive guidance at 29 C.F.R. 19 §§ 778.315, .317, .322). "Unlike regulations," the Second Circuit stated, "interpretations are not binding and do not have the force of law." The Second Circuit stated the DOL provides "no statutory support or reasoned explanation for [the 29 C.F.R. § 778.315] interpretation" (suggesting an employer could violate the FLSA by failing to compensate an employee for gap time worked when the employee also works overtime).

Although there is no gap time claim (if minimum wage is paid) under the FLSA, "there seems to be no lack of a state remedy" for gap time claims, including the New York Labor Law (NYLL). "The NYLL does recognize Gap Time Claims and provides for full recovery of all unpaid straight-time wages owed." In particular, NYLL § 663(1) states: "[i]f any employee is paid by his or her employer less than the wage to which he or she is entitled ... he or she shall recover in a civil action the...