What is Gap Time? What is the “Klinghoffer Rule”?

If you are one of those workers who has left a job and been paid your last check at the minimum wage instead of your regular hourly rate, let me explain how that happened and why it is legal. In 1965 an employer filed a lawsuit against the U.S. Department of Labor (DOL). The idea behind the lawsuit was that the DOL did not have the authority to force that employer or any other employer to pay more than the minimum wage, regardless of what the employer agreed to pay and regardless of how much the employer had actually paid.

The problem finds its foundation in the language of the minimum wage section of the Fair Labor Standards Act (FLSA) and the language of the overtime section of the FLSA. The minimum wage section says you shall pay the minimum wage, whatever it is at the time. The overtime section says you shall pay time and one half the regular rate for the hours worked over 40. The regular rate can be more than the minimum wage, but it can never be less. The court decided, what many people think is obvious, if you work less than 40 hours a week you are not required by the FLSA to be paid one penny more than the minimum wage. If you are making more than minimum wage and you actually work over 40 hours in a week, then you must be paid additional half time based on the hourly rate the employer paid you, even if it is more than minimum wage.

This case was appealed by the DOL, and the DOL, as they should have, lost. They lost because the law was not written in the manner in which it should have been written. They also lost because their political handlers at that time, the Democratic L.B.J White House did not want to upset business interests. So, since 1965 the DOL, the Courts, workers and many others have had to deal with what has become known as the “Klinghoffer Rule” (the plaintiff was an employer named Klinghoffer), or gap time which is the phrase adopted by lawyers and judges. This problem has cost workers many hundreds of millions, and perhaps billions of Dollars over the years.

There are two points I think are important here. First, any Congress could have, and I believe should have, fixed this problem during the last 50 years. The fact that the language in the FLSA has not been changed to favor workers is proof that neither party cares, at all, about workers. Second and maybe more importantly, every worker in the U.S. should be contacting their Congressional Representative to demand this change be made. If you do not start writing letters to Washington (not E-mail – “snail mail” letters), then you deserve this problem. Now you know. If information is power what will you do with your power?