Under the FLSA, entitlement to overtime pay for non-exempt employees is analyzed on a workweek basis, however, an employee must have a fixed and regularly recurring 168-hour workweek. 29 C.F.R. §§ 778.104, 105. The regulations do contemplate that an employer may modify the workweek on a prospective basis, provided the “change is intended to be permanent and is not designed to evade the overtime requirements of the Act.” But what happens when a prospective change is made, which, based on the employee’s fixed schedule, will reduce the amount of overtime regularly worked? This question was answered recently by the Court of Appeals for the Eighth Circuit, which ruled that such a change is lawful. Abshire v. Redland Energy Servs., 2012 U.S. App. LEXIS 20977 (8th Cir. Oct. 10, 2012).
In Abshire, the employer changed the employee’s workweek for FLSA purposes from Tuesday-to-Monday to Sunday-to-Saturday, which resulted in a reduction in overtime hours regularly worked. Plaintiffs argued that it was unlawful to make such a change if the change was calculated to minimize overtime liability under the FLSA, though conceding that the change was “permanent,” because such a change was an attempt to “evade” the requirements of the FLSA. The court disagreed, ruling that “[S]o long as the change is intended to be permanent, and it is implemented in accordance with the FLSA, the employer's reasons for adopting the change are irrelevant.”
Abshire upholds the DOL regulations as drafted, and preserves an employer’s right to prospectively modify the regular workweek to minimize overtime liability. However, employers must be cautious in changing the workweek even in light of Abshire, where changes are beyond a “permanent” change and can more readily be attacked as an effort to adjust the workweek to minimize overtime liability in circumvention of the Act.