In the case of Magnussen v. State of Wisconsin, Sarah Magnussen, a nurse clinician for the Wisconsin State Department of Corrections, claimed that the State of Wisconsin (State) had exempted her from receiving overtime pay. The State treated all nurse clinicians as salaried employees, meaning they received a specific amount of base pay for every pay period during which they work. Based on this, the State categorized Magnussen as exempt from overtime.
Magnussen argued that nurse clinicians should not be exempted from overtime pay based on their pay structure. In addition to a salary, nurse clinicians were entitled to receive supplemental pay, which is offered for positions where incentives are needed to retain employees. They were also entitled to additional compensation when they worked for over 40 hours per week. However, this additional compensation was calculated according to the Wisconsin Compensation Plan (WCP) instead of the Fair Labor Standards Act (FLSA).
Magnussen argued that the rate given by the WCP is significantly less than the FLSA. Magnussen claimed that the method of calculating her pay with add-ons should have made her a nonexempt employee. Despite that, the State filed for a summary judgment, arguing that Magnussen satisfies the criteria of the “salary basis” test.
The court found that Magnussen’s records supported the State’s argument that she is an exempt employee and granted the State’s motion for summary judgment.
Key lessons from this case:
- The salary basis test is one of the criteria used to determine whether an employee is exempt from overtime provisions.
- Understanding how compensation structures are evaluated regarding exemption status and overtime calculations is important for both employers and employees.
- Employees should be educated about the federal and state laws regarding overtime to avoid misunderstanding their rights.
If you want to know more about overtime regulations, read our guide on Wisconsin Overtime Laws.
