Hurley

Opinion by Judge REINHARDT.

I.INTRODUCTION

Neil M. Hurley represents a class of employees (“Class”) of the Oregon State Police. The Class appeals the district court’s summary judgment ruling, which held that its members were paid on a “salary basis” and therefore were not entitled to overtime compensation. We reverse.

II. BACKGROUND

The Class includes criminalists, first sergeants, lieutenants, and captains employed by the Oregon State Police. Under the police Disciplinary Procedures Manual (“Manual”), Class members are subject to “economic sanctions” whenever they violate departmental rules or policies. These sanctions include reductions in pay, temporary demotions with corresponding reductions in pay, and suspensions without pay.

The Class contends that the Oregon State Police violated the provisions of the Federal Labor Standards Act (“FLSA”) by failing to pay overtime to its members. Under Department of Labor regulations, employees who are subject to disciplinary reductions in pay generally (i) are not paid on a “salary basis” and (ii) are entitled to overtime compensation when they work more than the statutorily prescribed number of hours during a statutorily established…