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Golf Club Wins Federal Overtime Pay Case; Possible State Law Remedy


A golf club restaurant on Martha’s Vineyard was sued by a cook claiming the club failed to pay her overtime for hours she worked in excess of 40 per week.  Farm Neck Golf Club paid her $16/hour.  On several occasions she worked more than 40 hours in a week but received only her normal hourly pay for those over-forty hours.

As a general rule, employers must pay their workers overtime pay for hours worked in excess of 40 a week.  Overtime pay means a rate not less than time and one-half their regular rates of pay (150% of a worker’s hourly wage).   The overtime pay mandate is contained in the Fair Labor Standards Act  (hereinafter “FLSA”), a federal law that provides numerous protections to workers

In addition to overtime pay, the FLSA mandates minimum wage, equal pay for equal work, and restrictions on the hours young employees can work (so they have time to study and play), and on the tasks they can perform (various dangerous assignments are prohibited).

Per the FLSA, overtime applies on a work week basis, meaning seven consecutive 24-hour periods.  A work week need not coincide with a calendar week.  Instead, the work week may begin any day and at any hour of the day.  Different work weeks may be established for different employees or groups of employees.  Averaging a worker’s hours over two or more weeks is not permitted, meaning an employer must pay overtime for the week when the employee exceeds 40 hours even if, during the following or preceding week, the employee’s hours are less than 40.

Certain exceptions to the overtime pay rule exist.  A federal rule exempts from overtime pay amusement and recreational establishments that are seasonal businesses, meaning they are closed or partially closed for a significant part of the year.

To qualify, the business must either: a) restrict its operations to a maximum of seven months a year (called the “seasonal operation test”), or b) during the preceding calendar year, its average receipts for any 6 month period did not exceed one-third of its average receipts for the other six months of the year (the “receipts test”).  Turns out the golf club restaurant operates for more than seven months in the calendar year.  Therefore the eatery did not qualify for an exemption of the overtime pay rule using the seasonal operation test. 

However, in the late fall and winter months, the restaurant’s operations are limited such that it qualified for the receipts test.  For the months of April through September, the club’s total receipts were $5,979,081.31.  For the months of October through March, the total receipts were $456,753.59, only 7.6% of the highest six months, significantly below the one-third statutory threshold. 

Therefore, because the golf club is a recreational establishment and meets the receipts test, plaintiff was not entitled to overtime pay.  The court thus granted summary judgment  to the restaurant on the cook’s FLSA claim.  Summary judgment is a procedural device enabling prompt disposition of a case without the need for a trial. It is used when the facts are not in dispute.  The lawsuit is thus resolved based on a question of law.

Note: Some state wage laws require overtime pay notwithstanding the federal exemption.  An employer must comply with the more stringent of the state or federal provisions.  In the golf club restaurant case, it is possible a state law exists because the federal court ended its decision by saying, “I decline to retain jurisdiction over the remaining purely state claims.”  Therefore, the dismissal of the case was without prejudice  (without any loss of rights) to plaintiff, thereby enabling the cook to pursue the lawsuit in the appropriate state court based on state law.