Hageland pilots due overtime pay
JUDGE: Docking crew for working less than a full day not allowed under state law.
A state judge has found that some pilots of Hageland Aviation Services who had been classified as exempt from Alaska's overtime wage requirements are entitled to overtime pay because the rural air carrier's compensation practices ran askew of state labor laws.
In a pretrial summary judgment released this week, Superior Court Judge Peter Michalski said Hageland, which pays its pilots by the day, routinely docked them when they worked less than a full day.
That's not allowed under state labor laws that establish how salaried and hourly employees are paid, Michalski said.
The Alaska Wage and Hour Act requires that employers pay overtime wages to employees who work more than eight hours a day or 40 hours a week.
People who are "employed in a bona fide executive, administrative or professional capacity" can be exempted from the overtime requirements, provided the employer meets certain conditions, including that the employee be paid on a salary or fee basis, and the pay must be the same regardless of the number of hours worked, Michalski said.
Hageland's practice of docking pilots' pay for partial days worked disqualified them from the professional exemption and entitles them to overtime pay, Michalski said.
Some Hageland pilots also were getting paid less than $300 a day, while the state law says that if an employee is paid a daily rate, it must be at least $300 a day or the employee cannot be exempt from overtime pay, Michalski said.
The judge also said that Haegland is liable for "double damages" -- meaning it could have to pay the owed money as well as a penalty equal to the underpaid wages -- and he certified the case as a class action, which the attorney for the pilots said could include as many as 80 people who may be entitled to millions of dollars.
"One of the things that's still open is how the overtime should be calculated," said Tim Petumenos of Anchorage law firm Birch Horton Bittner Cherot.
"It could go into the millions because they were on call for 12 hours, and the law is if you're on call, it counts."
Anchorage-based Hageland flies passenger and cargo routes throughout the state, particularly in Western Alaska.
Petumenos filed the suit against Hageland in June 2002.
Hageland's attorney, Tom Daniel of Perkins Coie in Anchorage, did not dispute the claim that some pilots were paid less than their normal daily rate. He said that typically happened at the end of a two-week rotation, when they worked only half a day, and the pilot taking over for them worked the other half.
"No Hageland pilots were treated unfairly," Daniel said. "They got paid what they were due to be paid, and this lawsuit seeks to get paid even more."
Daniel also argued that federal law allows for employers that have made improper partial-day pay deductions to correct the issue by reimbursing the employees and changing its practices.
But Michalski rejected that argument, saying it would be inappropriate to allow for that type of remedy once legal proceedings have begun. He referred to a previous state case in which a judge deemed that doing so would set a precedent under which employers abuse the system by improperly paying employees then avoiding liability when sued by simply paying what was originally owed.
Daniel also pointed out a disparity between federal labor law -- which specifically exempts flight crews from overtime requirements -- and state law, which at the time the suit was filed did not.
During last year's legislative session, state Sen. Donald Olson, D-Nome, sponsored a bill to add an exemption of flight crews from the state Hour and Wage Act. It became law last April.
Olson said he introduced the legislation in response to concerns he heard from several air taxi service providers in the state. But he said he had not heard from Hageland, nor was he aware of the class action.
"We put it in to clear up some ambiguity that people thought they had under the (state) Wage and Hour Act," Olson said.
The next step in the Hageland case is to determine how many people will take part in the class action and how much overtime they worked.
Although Petumenos said damages could be in the millions, he stressed that the suit is not aimed at harming Hageland financially.
"There are lots of ways this case can be settled," he said. "We want to be sensitive to the fact that these pilots need their jobs."
