In the case of Kerr v. K. Allred Oilfield Services, LLC., Kerr filed a lawsuit against K. Allred Oilfield Services (KAOS), for unpaid overtime wages and damages. Kerr filed a collective action under the Fair Labor Standards Act (FLSA) and a class action under the New Mexico Minimum Wage Act (NMMWA).
Kerr worked as an operator for KAOS and alleged that he was misclassified as an independent contractor and not paid overtime despite working more than 40 hours per week. Instead of receiving a salary or hourly pay, he was paid a day rate for all hours worked. KAOS claimed that this day rate constituted a flat rate schedule, which was excluded under the NMMWA.
KAOS sought to dismiss the NMMWA claims. They argued that the day rate compensation received by Kerr fell under the NMMWA’s exclusions for overtime pay. The court applied the standard for evaluating a motion to dismiss and determined that Kerr’s allegations were sufficient to state a plausible claim. Although there was no definitive case law that existed on the definition of “flat rate schedule” under the NMMWA, the court considered previous similar cases.
Consequently, the court denied KAOS’ motion to dismiss the NMMWA claims, as the allegations provided enough factual content to infer liability under the NMMWA. However, the court noted that the matter of “flat rate schedule” is difficult to interpret. The court ruled that this matter was to remain open in the district due to the absence of conclusive case law on the subject.
Key lessons from this case:
- Employers cannot avoid overtime obligations by paying a flat rate or day rate that does not account for the actual number of hours worked.
- A day rate is not automatically considered a flat rate schedule under the NMMWA, and further interpretation is required to determine their compatibility.
- The burden is on the employee to provide factual content that allows the court to infer liability on the part of the defendant.
If you want to know more about overtime regulations, read our guide on New Mexico Overtime Laws.
