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ARTICLE · 13 APRIL 2023

Lit Alerts—March 2023

Arnold & Porter
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The U.S. Court of Appeals for the Third Circuit affirmed partial summary judgment for an employer in a putative class action, holding paid time off (PTO) is a "fringe benefit"...

United StatesEmployment and HR
Nicole L. Masiello
Nicole L. Masiello
Kathleen P. Duffy
Kathleen P. Duffy
Mohamed Al-Hendy
Mohamed Al-Hendy
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Employment: Paid Time Off Is Not Part of an Employee's Salary, Third Circuit Holds

The U.S. Court of Appeals for the Third Circuit affirmed partial summary judgment for an employer in a putative class action, holding paid time off (PTO) is a "fringe benefit" rather than part of an employee's salary under the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. In Higgins v. Bayada Home Health Care Inc., Bayada, a home healthcare company, employed the plaintiffs as salaried employees, meaning they were not entitled to overtime pay under the FLSA. However, Bayada also required employees to meet a weekly productivity quota, and if they failed to meet that quota, Bayada would deduct time from the employee's available PTO to make up for the difference between time worked and the quota.

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