SESCO’s Weekly Client Update

REAL AVERAGE HOURLY EARNINGS DECREASE 0.6% IN MARCH

• The U.S. Bureau of Labor Statistics (BLS) has reported that real average hourly earnings for all employees decreased 0.6 percent from February 2026 to March 2026. This result stems from an increase of 0.2 percent in average hourly earnings combined with an increase of 0.9 percent in the Consumer Price Index (CPI).

• Real average weekly earnings decreased 0.9 percent over the month due to the change in real average hourly earnings combined with a decrease of 0.3 percent in the average workweek.

• From March 2025 to March 2026, real average hourly earnings increased 0.3 percent.

PAYING AN EMPLOYEE A SALARY DOES NOT AUTOMATICALLY MEAN "NO OVERTIME"

• Paying an employee a salary does not automatically eliminate the requirement to pay the employee overtime. Too often, we hear that, “the employee is paid a salary, so overtime doesn’t apply.”

• Under the Fair Labor Standards Act, for the executive, administrative, or professional exemptions from the requirement to pay overtime to an employee to apply, an employee must satisfy the following three requirements: (1) the employee must be paid on a salary basis, meaning a fixed, predetermined amount that is not reduced because of variations in the quality or quantity of the employee’s work (the “salary basis test”); (2) the employee must meet the minimum salary threshold of at least $684 per week (the “salary test”); and (3) the employee’s actual job must meet the requirements of the applicable exemption (the “duties test”).

• Each exemption sets forth a set of “duties” that must be met for the particular exemption to apply. When considering the applicable duties test, the most crucial step is evaluating the employee’s actual job duties as performed in practice. Job titles and job descriptions do not determine if an employee is eligible for overtime. Additionally, state wage and hour laws may impose different or more stringent requirements, including higher salary thresholds or narrower duties tests, which must also be satisfied. In short, if an employee’s day-to-day work does not align with the duties test for the exemption being applied, the employee must be treated as an overtime eligible employee even if they are paid a salary.

NLRB RULES IN FAVOR OF HOSPITAL THAT DISCHARGED EMPLOYEE FOR HIPAA VIOLATIONS DURING UNION CAMPAIGN

• The National Labor Relations Board (“NLRB” or “Board”) has held that a hospital lawfully discharged a radiology technician because the employer demonstrated that it would have terminated the employee even absent her protected union activity.

• Importantly, the Board emphasized that the investigation was triggered by a manager who had no knowledge of the employee’s union activity and no apparent motivation to fabricate a complaint. Further, the hospital’s audit corroborated the complaint because it showed that the employee had, in fact, accessed the patient’s electronic file, including ICU records, and that this was outside the scope of a radiology technician’s typical duties.

• Also worth noting is that the Board found the employer acted in accordance with its disciplinary practices and procedures. The employer was able to establish that it had terminated other employees for comparable HIPAA violations.

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