Recently, the District Court for the Western District of Pennsylvania delivered some potentially bad news to Pennsylvania employers. In Truman v. DeWolff, Boberg & Associates, Inc., the Court held that an employee may be entitled to overtime payments for time worked in foreign countries under the Pennsylvania Minimum Wage Act and the Pennsylvania Wage Payment and Collection Law. The plaintiff, Michael Truman, worked for D.B.A., Inc. for a little over a year, and during that time worked in both England and in Canada. Truman sought overtime pay for overtime hours he worked in excess of 40 hours per week in both England and Canada.
At the summary judgment stage, the Truman admitted that he was not entitled to overtime payments under the Fair Labor Standards Act (FLSA) which specifically exempts work in foreign countries from overtime pay entitlements. However, Truman argued that under the Pennsylvania Minimum Wage Act he was entitled to such overtime payments because the Pennsylvania Minimum Wage Act provided for benefits exceeding those under the FLSA. The Court stated that unlike the FLSA, there was no specific exemption for working in foreign countries under the Pennsylvania Minimum Wage Act. The Court also noted that the Eastern District of Pennsylvania previously held that work in other states by Pennsylvania-based employees was covered by Pennsylvania Law. The Court concluded that there is nothing within the Pennsylvania Minimum Wage Act that restricts the benefits of the Act to work performed within the United States.
The Court also noted that the FLSA allows for state laws to provide greater protection than allowed under the FLSA, and therefore, there was no preemption issue in this case. The Court noted that there was no implied foreign work exemption under the Pennsylvania Minimum Wage Act, and therefore, for Pennsylvania residents working for Pennsylvania-based employers, there is no exemption from overtime pay requirements for work in foreign countries. The Court said that the analysis under the FLSA and the Pennsylvania laws is only identical if the language of the FLSA and state laws is identical. In this case, the analysis was different because the language was not identical, and therefore, the Court allowed the Plaintiff to move forward on his claim that he was entitled to overtime pay for hours worked in a foreign country under Pennsylvania law.
This decision has the potential to be costly for some Pennsylvania employers. How the courts will define who is a Pennsylvania resident and who is a Pennsylvania based employee for purposes of the Pennsylvania Minimum Wage Law and the Pennsylvania Wage Collection Act is unclear. These, and other issues, will need to be defined by the Courts in the future. In the meantime, employers are well advised to review their compensation practices in light of this decision.