Perhaps one of the most important terms of art under the Fair Labor Standards Act (“FLSA”), an employer’s designated workweek impacts nearly every aspect of an employee’s pay – from minimum wage and overtime to application of most exemptions. Let’s break down this concept.
What is a workweek?
The FLSA regulations define workweek as “a fixed and regularly recurring period of 168 hours – seven consecutive 24-hour periods.” Contrary to popular belief, a workweek need not coincide with a calendar week, nor must it align with an employer’s hours of operation. Instead, it can begin on any day and at any hour of the day. However, the key is that once a workweek is determined, it must remain fixed regardless of the employees’ hours worked with limited exception.
Can an employer adopt multiple different workweeks?
Yes, employers may adopt more than one workweek. The FLSA regulations expressly allow employers to adopt workweeks based on factors such as location/facility, groups of employees (e.g., departments), or even by employee. For example, an employer with operations of Monday through Friday may choose to adopt a workweek of Sunday at 12:01 a.m. to Saturday at 11:59 p.m. However, an employer who operates primarily on the weekends or perhaps is a 24-7 operation, may determine that a different workweek is logistically simpler or more beneficial to its operations.
Can an employer change its designated workweek?
Yes, changing workweek designations is permitted so long as the change is intended to be permanent and is not designed to evade the overtime requirements of the FLSA. While employers are not required to show a legitimate business reason for making the change, having contemporaneous documentation of the rationale can establish that the change was intended to be permanent. Employers should proceed with caution and in consultation with legal counsel when changing workweeks.
How are employees paid when a workweek changes?
A workweek change creates a unique situation in which hours or days fall in both the “old” workweek, as well as the “new” workweek. For example, if an employer’s workweek previously began on Monday at 7 a.m. and will now begin on Sunday at 7 a.m., the hours worked from 7 a.m. Sunday to 7 a.m. Monday will fall into both the old and new workweeks (“overlapping hours”).
In this situation, the Department of Labor (“DOL”), as an enforcement policy, will assume that overtime requirements have been satisfied if the employer pays the employee the greater of the two amounts computed below as follows:
- Include the overlapping hours as hours worked only in the “old” workweek and not in the “new” workweek; compute straight time and overtime compensation due for each of the two workweeks on this basis and total the two sums; or
- Include the overlapping hours as hours worked only in the “new” workweek and not in the “old” workweek; compute straight time and overtime compensation due for each of the two workweeks on this basis and total the two sums.
Must an employer provide employees with notice of the workweek change?
No, the FLSA does not require that employers provide notice to its employees of a workweek change. However, the change will not go unnoticed by employees, especially if it impacts their pay. Accordingly, as a best practice, employers should provide employees with advanced written notice of the change so that employees are not “surprised” when their paychecks arrive. The notice should explain the reason for the change, when it will go into effect, and how employee compensation might be impacted.
What about state law?
Employers should consult with legal counsel to determine whether there are any workweek laws or requirements that differ from the FLSA in all jurisdictions (state and local) in which they operate nationwide.