In Anani v. CVS RX Services, Inc., Docket No. 11-2359-cv (2nd Cir. 2013), plaintiff Salah Anani (“Anani”) was appealing a grant of summary judgment by the district court that Anani, a pharmacist at CVS, is exempt from the overtime requirements of the Fair Labor Standards Act (the “Act”) because he is a highly-paid employee.
In analyzing the case, the Second Circuit Court of Appeals (the “Court”) noted that FLSA Section 213(a)(1) provides an exemption from its overtime requirement for any employee employed in a bona fide executive, administrative, or professional capacity. To qualify for this exemption, an employee’s work must satisfy both a duties requirement and a salary requirement. Here, Anani conceded that the duties requirement is met. To meet the salary requirement, under FLSA regulations (at 29 C.F.R. § 541.600(a)), the employee must be compensated on a salary basis at a rate of not less than $455 per week. In turn, FLSA regulations (at 29 C.F.R. § 541.602) provide that an employee will be considered to be paid on a “salary basis” if the employee regularly receives each pay period, on a weekly, or less frequent basis, a predetermined amount constituting all or part of the employee’s compensation, which amount is not subject to reduction because of variations in the quality or quantity of the work performed. An employee is not paid on a salary basis if deductions from the employee’s predetermined compensation are made for absences occasioned by the employer or by the operating requirements of the business.
The Court found that Anani’s base salary substantially exceeded $455 per week and there were no impermissible deductions. There is also no dispute that Anani’s base weekly salary was guaranteed, to be paid regardless of the number of hours he actually worked in a given forty-four-hour shift. Thus, the salary requirement is met and the exemption applies.
Futhermore, the Court found that-due to additional pay for extra work hours that raised his total annual compensation to over $100,000 and the concession that the duties requirement is met- Anani also met the FLSA overtime exemption for highly compensated employees in the regulations (at 29 C.F.R. § 541.601(a)). This exemption applies to an employee whose total annual compensation is at least $100,000 and who customarily and regularly performs one or more of the exempt duties or responsibilities of an executive, administrative or professional employee.
Based on the above, the Court concluded that Anani was exempt from FLSA overtime requirements, and it upheld the district court’s summary judgment.