3rd Cir. Deepens Split on 'Gap Time' Pay Under FLSA

The U.S. Court of Appeals for the Third Circuit held that the Fair Labor Standards Act (FLSA) does not provide a remedy for unpaid "overtime gap time," deepening a split among federal appellate courts. The case, Secretary of Labor v. Comprehensive Healthcare, concerned hours worked but not paid during weeks in which an employee also worked and was paid for overtime. The court ruled the FLSA's text unambiguously requires only payment of minimum wages and overtime wages, and does not create a cause of action for other unpaid straight-time hours, provided the employee's effective pay rate remains above the federal minimum.

This decision directly impacts employers in the Third Circuit (Pennsylvania, New Jersey, Delaware) by eliminating a category of damages previously pursued by the Department of Labor. For sophisticated counsel, the ruling heightens the complexity for multistate employers, who must now navigate conflicting precedents across different circuits. While providing a defense against federal claims in the Second and Third Circuits, employers must remain aware that state wage laws or contract claims may still provide employees a path to recover these wages. The deepening circuit split increases the likelihood that the U.S. Supreme Court will eventually take up the issue to provide a uniform national rule.