|July 31, 2014|
Previously published on July 28, 2014
Under the Fair Labor Standards Act, an employer may use a Monday-through-Sunday “workweek” to calculate overtime pay for employees with work schedules of Thursdays through Wednesdays, the federal appellate court in New Orleans has ruled. Johnson v. Heckmann Water Res. (CVR), Inc., No. 13-40824, 2014 U.S. App. LEXIS 13501 (5th Cir. July 14, 2014).
The Court found the employer-established workweek was “a fixed, regularly recurring period of 168 hours—seven consecutive 24-hour periods,” which satisfied the FLSA and the relevant Department of Labor regulations, even though the actual work schedule covered two weeks and reduced the employees’ potential overtime pay. The Court affirmed summary judgment for the employer. The Fifth Circuit has jurisdiction over Louisiana, Mississippi, and Texas.
The plaintiffs, Brad Smith and Kevin Johnson, were classified as non-exempt employees under the FLSA and were paid hourly wages. They each worked 12-hour shifts for seven consecutive days beginning every other Thursday. Smith’s shift began at 6:00 a.m. and Johnson’s shift began at 6:00 p.m. The employer paid on a two-week pay schedule, with overtime calculated on a Monday-through-Sunday basis. Therefore, Smith routinely was paid 8 hours of overtime, Johnson, 4. The plaintiffs sued the employer for unpaid overtime under the FLSA, claiming the employer should have calculated overtime based on their actual schedule, Thursdays through Wednesdays, which would have entitled them to 44 hours of overtime each pay period.
The district court rejected this argument and granted summary judgment to the employer favor. The plaintiffs appealed.
Workweek Satisfied FLSA
Noting that the only question in this case was whether the employer violated the FLSA’s overtime wage requirements by using a Monday-through-Sunday “workweek” to calculate the plaintiff’s overtime compensation, the appellate court affirmed the district court’s grant of summary judgment in the employer’s favor.
The FLSA provides that “no employer shall employ any of his employees . . . for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed.” The FLSA does not define “workweek.” However, the Department of Labor’s regulation provides:
An employee’s workweek is a fixed and regularly recurring period of 168 hours—seven consecutive 24-hour periods. It need not coincide with the calendar week but may begin on any day and at any hour of the day. For purposes of computing pay due under the Fair Labor Standards Act, a single workweek may be established for a plant or other establishment as a whole or different workweeks may be established for different employees or groups of employees. Once the beginning time of an employee’s workweek is established, it remains fixed regardless of the schedule of hours worked by him. The beginning of the workweek may be changed if the change is intended to be permanent and is not designed to evade the overtime requirements of the Act.
Further, the DOL in a 2009 opinion letter advised that an employer’s 9-day, compressed workweek schedule satisfied the FLSA’s mandate that the workweek be fixed, consist of a 168-hour period, and that employees be paid at an overtime rate for hours worked over 40 in the specified pay period.
The Court also found support from its sister circuit, the U.S. Court of Appeals for the Eighth Circuit. The Eighth Circuit said in a case involving nearly identical facts that “an employer’s right to establish a workweek [is] ‘well-settled’” and explained that the FLSA, “standing alone, does not require that the workweek begin on any given day of the week.” Abshire v. Redland Energy Services, L.L.C., 695 F.3d 792 (8th Cir. 2012).
Finding the employer consistently applied the Monday-through-Sunday workweek and the calculation of hours worked conformed to the FLSA’s requirement, the Court affirmed summary judgment for the employer.
Selection of a workweek most efficient for the employer and maintaining that workweek consistently is an important part of wage and hour planning. Employers should regularly review their policies and practices with employment counsel to ensure they address specific organizational needs effectively, comply with applicable law and are well-documented in the event of a DOL audit.