Michael Truman was a Pennsylvania resident who worked as a management consultant for 16 months for a Texas-based management consulting company. He was assigned to client projects at client sites, including a six-month assignment in England and a one-week assignment in Canada.

After resigning, he sued the company, claiming that he had been misclassified as exempt and was owed overtime under the Fair Labor Standards Act (FLSA) and the Pennsylvania Minimum Wage Act (PMWA). The company sought partial summary judgment as to the time periods that Turner had spent working in England and Canada, arguing that the FLSA and PMWA did not apply outside of the United States.

The court granted the motion as to Turner's FLSA claim based on the FLSA's exemption for work performed outside of the United States. 29 U.S.C. 213(f). However, the court denied summary judgment as to Turner's PMWA claim. The court reasoned that, unlike the FLSA, the PMWA contains no express exemption for work performed outside of the United States, and the court would not infer one, noting that the PMWA was originally enacted to protect employees who were not protected by the FLSA and that state law may provide greater protection to employees than the FLSA. The court concluded that while the PMWA was silent as to its extra-territorial reach, it should be construed to provide protection to Pennsylvania based-employees while they are working on assignments outside of the United States.

The court relied on Friedrich v. U.S. Computer Systems, Inc., 1996 WL 32888 (E.D. Pa. Jan. 22, 1996), which had held that the PMWA applied to work performed out of state by employees who were deemed to be Pennsylvania-based employees. In Friedrich, the plaintiffs were deemed to be Pennsylvania-based employees because, while they were not Pennsylvania residents, they were hired in Pennsylvania and reported into a Pennsylvania office from which they received assignments and paychecks.

In this case, the fact that Turner was a Pennsylvania-based employee was not disputed by the parties, so the court did not address what makes an employee, such as Turner, Pennsylvania-based for purposes of the applicability of the PMWA (i.e. is residency alone sufficient for employees who work at client sites outside of the state or does there have to be some showing of actual work done in Pennsylvania, for example, writing reports or sending and receiving e-mails from a home office?). What is clear, however, is that employers must carefully examine and comply with both state and federal wage and hour laws. Plaintiffs' attorneys are increasingly exploiting the differences between the two.

This blog entry was authored by Martha Keon.