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AMN Services, LLC v. Clarke

A healthcare staffing company called AMN Services, LLC, employs nurses to work at hospitals across the country. It pays the nurses both an hourly wage and an amount designated a per diem. For nurses who work near their homes, the per diem payments are characterized as wages and included in the calculation of the regular rate of pay for purposes of overtime. For nurses who work more than 50 miles away from their homes, AMN characterizes the per diem payments as reimbursements of travel expenses and excludes them from their regular rate of pay, thereby decreasing their wage rate for overtime hours.

Nurses who worked for AMN away from their homes brought suit under the Fair Labor Standards Act and California state law, alleging that AMN improperly excluded the per diem payments from the calculation of their regular rate. Reversing the district court, the Ninth Circuit held that per diem benefits functioned as compensation for work, rather than as reimbursement for expenses incurred by traveling clinicians, and that the benefits were therefore improperly excluded from plaintiffs’ regular rate of pay for purposes of calculating overtime pay. The court relied on facts including, among others, that AMN reduced the per diem payments for shifts not worked, regardless of the reason for not working; a “banking hours” system under which an employee could work extra hours one week to avoid reduced per diem pay the next; and that AMN paid the same per diems to nurses who did not travel, among other facts.

AMN petitioned the Supreme Court for review and obtained six amicus briefs supporting its petition. Public Citizen joined as Supreme Court co-counsel for the plaintiffs, opposing the petition for certiorari. The court denied the petition.