Flexible or nontraditional work schedules are hardly unusual in today’s workplaces. But their impact on overtime pay requirements under the Fair Labor Standards Act (FLSA) can lead to trouble for employers.
The two nonexempt plaintiffs worked 12-hour shifts for seven straight days beginning every other Thursday. The employer calculated overtime based on a Monday through Sunday workweek and paid its employees biweekly.
The employees sued, arguing that the workweek for over- time purposes should have reflected the Thursday through Wednesday schedule that they regularly worked. If their employer had applied this schedule, both employees would have been entitled to 44 hours of overtime every other week when they worked the 12-hour shifts.
Instead, because of the Monday through Sunday work- week for payroll, they only received four or eight hours of overtime per pay period, depending on whether the employees worked the day shift or night shift. The district court entered summary judgment in the employer’s favor, and the plaintiffs appealed.
The plaintiffs argued that Department of Labor (DOL) regulations state:
…different workweeks may be established for different employees or groups of employees. Once the begin- ning time of an employee’s workweek is established, it remains fixed regardless of the schedule…
Thus, they contended, a Monday through Sunday work- week violated the FLSA because they’d always worked Thursday through Wednesday.
The Fifth Circuit, however, affirmed the district court’s decision. It pointed out that the regulation uses the word “may” and, therefore, using different workweeks isn’t mandatory. The court also held that the plaintiffs couldn’t cite any authority requiring employers to estab-lish a workweek that reflected their actual work schedule.
In addition, the Fifth Circuit stated that the FLSA doesn’t define the term “workweek” and the act’s regulations don’t require a workweek to coincide with a calendar workweek or employees’ schedules.
Eighth Circuit precedent
On the questions of whether employers have a right to establish a workweek and whether they’re obligated to begin a workweek on any certain day, the Fifth Circuit agreed with the reasoning of the U.S. Court of Appeals for the Eighth Circuit in Abshire v. Redland Energy Services, LLC.
In that case, which was nearly identical to Johnson, the Eighth Circuit held that a payroll schedule in which an employee’s actual work schedule is split between two workweeks doesn’t violate the law just because, under a consistently designated workweek, its employees earn fewer hours of overtime than they would if the workweek reflected their actual schedules.
Finding the Eighth Circuit’s reasoning persuasive, the Fifth Circuit explained that, just because an employer’s workweek doesn’t maximize an employee’s overtime com- pensation, the employer doesn’t, “standing alone,” vio- late the FLSA. The Fifth Circuit held that the employer’s payroll workweeks complied with the FLSA because, as DOL regulations require, they were fixed and consisted of 168-hour periods, and employees were paid for any hours they worked over forty in that specific period.
This case is a good example of an employer benefiting from a technical analysis of the FLSA’s language. Bear in mind, however, that reliance on the statute’s wording is a two-way street.
For instance, if you’re relying on an exemption from pay- ing someone overtime, the exemption must comply with all applicable FLSA requirements. Check regularly with your attorney to ensure all technical aspects of your over- time and exemption arrangements are in compliance with the law.