A recent U.S. Court of Appeals for the Fourth Circuit decision concerning the Fair Labor Standards Act and overtime pay has employment law experts saying this is a cautionary tale for companies trying to pay their employees at a blended rate.

The appellate panel held earlier this month that Fire & Safety Investigation Consulting Services LLC and its owner, Christopher Harris, did not keep adequate records and violated the FLSA by failing to pay overtime to certain employees in Pennsylvania and West Virginia. The U.S. Department of Labor had filed suit in February 2017 against Fire & Safety over the allegations as the U.S. District Court for the Northern District of West Virginia ordered Fire & Safety last May to pay back wages and damages totaling $1.6 million.