Overtime Pay Questioned

9th Circuit Courthouse

Some 2,000 unlicensed junior accountants for PricewaterhouseCoopers may be exempt from California’s mandatory overtime pay rules.  The 9th U.S. Circuit Court of Appeals ruled today that there should be a trial to decide the issue.  This is a setback for the accountants.

A trial judge had previously ruled they were entitled to overtime under California law and could not be exempted as having administrative duties.  But the appeals court sees it differently and sent the class action back to federal court in Sacramento.

California labor law mandates overtime pay to any employee who works more than eight hours a day or 40 hours a week.  But there are exceptions.  These include exemptions that are classified as professional, executive or administrative work exemptions.

Pricewaterhouse argued the junior accountants had administrative duties that made them exempt from the overtime pay.

Pricewaterhouse is an international accounting firm that employs 30,000 people in the U.S., with six offices in California.  The junior accountants sued seeking overtime but the company said accountants could be exempt from the overtime law.

Although the trial judge, Lawrence Karlton, found the 2,000 accountants were not exempt, the appeals court said Karlton overlooked some key issues, including whether the employees worked only under “general supervision,” a critical element of the administrative exemption.

The appeals court said Karlton stretched the overtime rule too far and could create “troubling results,” such as having to pay overtime to first-year law associate who had passed the bar exam but not received his results; or a state Supreme Court law clerk waiting until after the clerkship to take the exam.

While the junior accountants were low in the Pricewaterhouse hierarchy, they may still meet the standards to be exempt from overtime pay, according to Judge Richard Tallman.

 Case:  Campbell v. PricewaterhouseCoopers, No. 09-16370 (9th Circuit)

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