Lawsuit over 2013 Shutdown Advances

The Justice Department is notifying more than 1 million federal employees that they can join a suit against the government for not paying them on time during the 2013 partial shutdown.The lawsuit filed under the Fair Labor Standards Act (FLSA) seeks minimum wage compensation of $7.25 per hour for all hours worked during the shutdown where the government delayed paychecks because of the budget lapse.Donald Martin, Jr., et al. v. The United States, No. 13-834C (U.S. Court of Federal Claims E-Filed 10/16/14).

Under the FLSA, employees must be paid minimum wage and compensated for overtime work on their regularly scheduled payday after performing the work. The first biweekly pay period affected by the partial shutdown was that of 9/22-10/5, 2013. While employees who worked throughout the shutdown (because their agencies decided that the nature of their jobs demanded it) received a payment covering work performed 9/22-9/30, on their regularpay distribution covering the biweekly period, that distribution did not include pay fortime worked during the 10/1-10/5 part of that pay period.

Even though the government retroactively paid these employees, it did not do so timely—not until the following pay distribution. That subsequent pay distribution contained pay for 10/5 until the shutdown ended on 10/15, as well as for the remainder of thebiweekly pay period that started on 10/6, and thus there was no delay in paying people for work after 10/5.

After the lawsuit was filed, the Justice Department filed a motion to dismiss the case on several grounds. The main question presented to the court was whether the plaintiffs could recover under the FLSA for the delay in the payment of their wages. Acknowledging that it was a case of first impression, the Chief Judge, citing to precedents in other courts, decided: “The FLSA requires – and the Supreme Court has recognized approvingly – that an employee receive on time payment for work performed. The court understands such timeliness to mean that an employer pays an employee on the regularly scheduled paydays.”

Because it is an opt-in class comprised of FLSA “non-exempt employees” (that is, employees who are eligible for overtime under the FLSA; an FLSA “exempt” employee is one who is not eligible) who were required to work without pay for that period, each potential plaintiff must decide if he or she wants to participate. Specific qualification requirements and procedures are on the notices.

There is also a possibility of liquidated damages, double back pay, if the plaintiffs can prove that the government’s action was willful. However, the government has argued that it was dealing with circumstances beyond its control as the Antideficiency Act requires all agencies to cease operations during a budget lapse unless they are vital to national security or funded through sources beyond appropriations.

It likely will be some time until this case reaches a final resolution.

* This information is provided by the attorneys at Passman & Kaplan, P.C.