Are pilots overtime exempt? A new ruling in Alaska may change the answer

Should pilots be classified as ‘professionals’ in relation to exemption for pay for overtime work? 

Lane Powell of Lane Powell Attorneys & Counselors,  and Dan Selcke of Wolters Kluwer, both recently wrote articles exploring just this. Specifically, the authors investigate a recent Alaska ruling that could have potentially wide implications for employers who classify pilots and other employees as overtime exempt.

Moody v. Royal Wolf Lodge revolved around a claim for overtime pay by a pilot. The plaintiff sued for unpaid overtime wages from 2006 – 2007, during which he claimed he worked more than eight hours per day and more than 40 hours per week.

Under both federal law and Alaska state law, non-exempt employees who work more than 40 hours in a week are entitled to overtime pay at 1.5 times their regular rate. Certain categories of employees are exempt from these rules.

In this case, the employer, Royal Wolf Lodge, classified the plaintiff as an exempt professional under the Fair Labor Standards Act (FLSA) and the Alaska Wage and Hour Act. This was in line with the 1993 Alaska Supreme Court decision in Dayhoff v. Temsco Helicopters that found the pilot plaintiff to be an exempt professional.

A 2005 change in Alaska law, however, restricted the definition of an exempt employee to only professionals for whom specialized academic training is a standard prerequisite. In the recent lawsuit, Royal Wolf Lodge argued that the plaintiff met those requirements as he was trained by flight instructors and had passed the oral and written tests by the Federal Aviation Administration.

The Alaska Supreme court, however, ruled that Moody is not an exempt professional, as his career does not require a prolonged course of ‘specialized intellectual training’. The court identified the relevant pilot education as ‘advanced training’, distinct from ‘academic or intellectual instruction.’ When the defendant pointed to the extensive training and licenses the plaintiff obtained, the court noted that the instruction Moody acquired was of his own choosing, rather than being a standard prerequisite for the profession.

The superior court issued a final judgment for Moody of $12,833 in unpaid overtime wages.

What does this mean for employers of pilots in Alaska and beyond?

Although the ruling in this case is specific to pilots in Alaska, the court suggests that pilots in other states may also be misclassified as exempt from overtime pay under the FLSA. Most importantly, the reasoning used in this case can be applied in lawsuits outside of Alaska.

Powell suggests employers re-evaluate employees classified as exempt in light of this new ruling. She reminds readers that the financial consequences for misclassifying an employee as overtime exempt can be substantial, ranging from time-and-a-half pay for overtime worked, to overtime damages being doubled under statutory law.