The Pennsylvania Supreme Court has agreed to consider whether the fluctuating workweek method for calculating overtime payments for salaried employees violates state law.

The justices on Monday agreed to hear an appeal in the case Chevalier v. General Nutrition Centers to specifically address whether Pennsylvania's Minimum Wage Act allows an employer to pay a salaried employee half of their regular rate for every hour worked over 40 in a given week, rather than one-and-a-half times their regular salary for each overtime hour.

Late last year, a split three-judge panel reversed the decision of an Allegheny County Court of Common Pleas judge and said that paying only half of the salaried employee's regular rate violated the law. Instead, the court said, employers must pay an additional 150 percent of the employee's regular rate when paying overtime.

Michael Simon of Roe & Simon, who represented the plaintiffs, said he hopes the Supreme Court affirms the Superior Court's ruling.

“The Common Pleas Court decided the issue, and decided it consistent with three federal courts, and the appellate court agreed. The Pennsylvania Department of Labor refused to give an opinion as to the scope of the law, so as far as we're concerned, the question was decided correctly in the courts below,” Simon said. “We hope the Supreme Court affirms.”

Judge H. Geoffrey Moulton Jr., who wrote the Superior Court's precedential opinion, noted that, although federal regulations allow companies to pay half an employee's regular rate, the PMWA clearly states that employers must pay one and one-half, or 150 percent, of the employee's regular rate for every hour worked over 40.

“In addition, the secretary [of Labor and Industry] chose not to adopt the federal regulation that expressly authorizes the one-half multiplier used by GNC,” Moulton said. “Taken together, these regulatory choices compel the conclusion that GNC's payment of an overtime premium of only one-half the 'regular rate' violates Pennsylvania law.”

Although that ruling was a win for plaintiff Tawny Chevalier and Andrew Hiller, GNC employees who are pursuing a class action against the company over its overtime policies, Moulton also determined that GNC was using the appropriate method for determining the “regular rate” of salaried employees—an issue that was also in dispute before the Superior Court, but has not been taken up as part of the appeal before the Supreme Court.

Regarding the regular rate, the employees had argued that companies in Pennsylvania should divide their weekly salary by 40 hours to determine each employee's “regular rate” that would then form the basis for calculating their overtime earnings. GNC, however, argued that its method of dividing each employee's salary by the total number of hours he or she worked each week was the proper method for establishing an employee's “regular rate” each week.

Although GNC's preferred method tends to fluctuate each week, it would consistently establish a lower rate than dividing each employee's weekly salary by 40, Moulton noted.

Regarding whether the 50 percent or 150 percent multiplier should be used for overtime, GNC contended its method of adding only half of the regular rate to the overtime hours is proper, because the employee's straight salary essentially covers the first 100 percent of the overtime compensation, which is how overtime is calculated under the federal Fair Labor Standards Act.

Moulton, however, disagreed.

“Had the department wanted to authorize one-half time payment for employees such as plaintiff here, it surely knew how to do so,” Moulton said. “This observation is reinforced by the department's decision, undoubtedly a conscious one, to not adopt the federal regulation that expressly authorizes the one-half times regular rate overtime premium.”

Robert Pritchard of Littler Mendelson, who represented GNC, did not return a call for comment.