Certain Per Diem Payments Increase The FLSA Regular Rate

Seyfarth Synopsis: The Ninth Circuit has held that a weekly per diem benefit paid by a healthcare staffing agency to its traveling clinicians is a wage that increases the employee's regular rate used to calculate overtime pay. Clarke v. AMN Services, LLC.

Facts

Plaintiffs worked as traveling clinicians for a healthcare staffing company. They earned a designated hourly wage, as well as a weekly per diem benefit. They sued the company under the Fair Labor Standards Act ("FLSA") for unpaid overtime wages, on the theory that the company failed to consider the per diem benefit in calculating the overtime rate. A federal district court granted summary judgment to the company, reasoning that the weekly per diem benefit was not a "wage" but instead was a reasonable reimbursement for work-related expenses such as meals, incidentals, and housing, and therefore was properly excluded from the regular rate of pay. Plaintiffs appealed.