Employer loses FLSA appeal-Per Diem payments part of regular rate

An employer's use of a per diem rate did not insulate it against an employee's claim under the Fair Labor Standards Act (FLSA). The employer's contract with an experienced aircraft painter, specified a $5.50 hourly rate and a $20.00 overtime rate. The employee also received a per diem of $12.50 for every hour worked up to 40 in a work week. A year into the contract the employer announced a $1.00 and hour raise. Plaintiff's $5.50 straight time rate was not changed, the per diem was raised $1.00. The Fifth Circuit, in Gagnon v. United Technisource, Inc. et al, No. 09-20098 (May 27, 2010) affirmed summary judgment to the employee. More after the jump.