UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 01-40239
DALE WAYNE BERRY, Individually and on Behalf
of All Others Similarly Situated,
Plaintiff - Appellant,
VERSUS
EXCEL GROUP, INC.
Defendant - Appellee.
Appeals from the United States District Court
for the Eastern District of Texas
April 19, 2002
Before ALDISERT,* DAVIS, and PARKER, Circuit Judges
W. EUGENE DAVIS, Circuit Judge:
Appellant, an electrician who works for various sub-
contractors on large constructions jobs, challenges the district
court’s order declining to include a weekly expense per diem
payment as part of his regular wages for purposes of computing
*
Circuit Judge, U.S. Court of Appeals for the Third Circuit,
sitting by designation.
overtime compensation. For reasons states below, we agree with the
district court that the expenses the per diem was designed to
reimburse were incurred primarily for the employer’s benefit and
were not excessive. We therefore affirm the district court’s
judgment.
I.
Dale Berry, an electrician, was hired by Excel Group, Inc.
(Excel), an electrical subcontracting firm, to work at a refinery
construction project in Port Arthur, Texas. In his application for
employment, he disclosed that he lived in Brookewood, Texas,
located approximately 100 miles from the jobsite in Port Arthur.
He was hired at a rate of $17/hour plus a “per diem” of $100/week.
Berry was promoted part-way through the job, receiving a raise to
$20/hour and a $150/week per diem. Rather than commute between
Brookewood and Port Arthur, Berry lived out of his travel trailer
near the worksite for the six week duration of his job.
It is uncontested that Excel offered the same per diem to all
electricians, no matter where they lived. Berry sued Excel in the
district court on the theory that the FLSA requires this per diem
to be counted as regular pay rather than reimbursement, thus
raising his hourly wage rate and his time-and-a-half overtime wage
rate. The district court granted Excel’s motion for summary
judgment, holding that the per diem is reasonable under the FLSA’s
reasonableness test. Berry appeals.
II.
2
We review a district court’s grant of summary judgment de
novo, applying the same standard as the district court.1 The FLSA
provides, in pertinent part, that the regular rate of pay does not
include “reasonable payments for traveling expenses, or other
expenses, incurred by an employee in the furtherance of his
employer’s interests and properly reimbursable by the employer.”2
The regulation interpreting this subsection provides that
[w]here an employee incurs expenses on his employer’s
behalf or where he is required to expend sums solely by
reason of action taken for the convenience of his
employer, [this section] is applicable to reimbursement
of such expenses. Payments made by the employer to cover
such expenses are not included in the employee’s regular
rate (if the amount of the reimbursement reasonably
approximates the expenses incurred) Such payment is not
compensation for service rendered by the employees during
any hours worked in the work week.3
The regulation provides examples of types of reimbursements
that do not affect the employees’ regular wage rate. The examples
include: travel expenses and temporary home-to-work expenses
“incurred (i) because the employer has moved the plant to another
town before the employee has had an opportunity to find living
quarters at the new location or (ii) because the employee, on a
particular occasion, is required to report for work at a place
1
See, e.g., Merritt-Campbell, Inc. v. RxP Products, Inc., 164
F.3d 957, 961 (5th Cir.1999); Morris v. Covan World Wide Moving,
Inc., 144 F.3d 377, 380 (5th Cir.1998).
2
29 U.S.C. § 207(e)(2).
3
29 C.F.R. § 778.217(a).
3
other than his regular workplace.”4 On the other hand, “if the
employer reimburses the employee for expenses normally incurred by
the employee for his own benefit, he is, of course, increasing the
employee’s regular rate thereby. An employee normally incurs
expenses in traveling to and from work.... If the employer
reimburses him for these normal everyday expenses, the payment is
not excluded from the regular rate as ‘reimbursement for
expenses.’”5
We agree with the district court that the per diem Excel paid
Berry was a legitimate, reasonable reimbursement of travel
expenses. Excel hired Berry to work in Port Arthur with full
knowledge that he lived in Brookewood, 100 miles from the Port
Arthur jobsite. Berry’s travel to Excel’s job site was primarily
for Excel’s benefit and the $100-$150 per week per diem is
certainly not excessive. If Berry had commuted daily to the job
site, he would have faced a 1,000 mile per week commute. A
reimbursement rate of $.15 per mile would amount to $150 per week.
The fact that Berry elected to live in his travel trailer instead
of commuting does not mean that he had no temporary living expenses
related to working in Port Arthur. He would be expected to pay
rent on a lot to park his trailer, utilities, and meals. These
expenses were in addition to his regular recurring household
4
Id.
5
Id.
4
expenses in Brookewood where his family lived and where he
maintained his primary residence. The regulations sensibly
authorize the employer to approximate such expenses as long as the
amount of the per diem is not “disproportionately large”.6
III.
Berry also argues that the district court failed to give
adequate consideration to Excel’s policy of paying all employees
the same per diem regardless of the distance they live from the job
site. Berry contends that their policy establishes that the
employer uses the per diem as a way of increasing the employees’
salaries without raising their FLSA regular rate of pay in order to
avoid paying time-and-a-half on the marginal difference for
overtime pay.
From the language of the FLSA itself and the related
regulations, we find that the Act requires each employee’s expenses
to be examined on a case-by-case basis to see whether the “per
diem” is appropriate and reasonable.7
Because the per diem paid to Mr. Berry was reasonable and
appropriate, the district court correctly concluded that these
payments should be excluded in computing his wage rate. The next
case must be judged on its own facts.
6
See 29 C.F.R. § 278.217(c).
7
For instance, the general rule quoted at length in Section II
above provides that courts must examine specific payments mady by
an employer to an employee to cover specific expenses.
5
We therefore affirm the district court’s summary judgment and
its denial of relief under Rule 60(b) F.R.A.P.
AFFIRMED.
6