“You owe me more overtime because you're not using the right workweek to calculate it,” John, a tour guide, told Toby, his employer's payroll administrator. “You should use the actual seven-day period I work instead of a fixed workweek.”
“We are following the FLSA, so you're receiving a fair amount of overtime,” Toby said.
FACTS:An educational tour guide claimed that the workweek used for overtime calculation should vary with each seven-day period he worked. His employer maintained a consistent workweek for overtime calculation, which he claimed allowed it to avoid paying him maximum overtime.
While the employer used a workweek that started Sunday and ended Saturday to calculate overtime pay for hours worked in excess of 40 hours a week, the employee's schedule often would start and end on different days. For example, although his program sometimes started on Sunday and ended on Saturday, it often started on Wednesday and ended the following Wednesday.
If the employee worked 42 hours from Wednesday to Saturday, he would receive two hours of overtime pay at one and one-half times his regular rate of pay. If he then worked 48 hours from Sunday to the next Wednesday, he would receive eight hours of overtime pay, bringing the total overtime for both fixed workweeks to 10 hours.
The employee claimed that the employer should instead calculate overtime for the seven-day period he worked, Wednesday to Wednesday, instead of the Sunday-to-Saturday workweek and pay him 50 hours of overtime. State law should be interpreted liberally to support his claim, the employee said.
State minimum wage law says an “employee shall not be required to work more than forty hours in any week of seven days, unless the employee is paid one and one-half times the employee's regular hourly rate pay for all hours worked in excess of forty hours.” The employee said “any week of seven days” should be applied to the seven-day periods the employee worked that did not correspond with the employer's fixed workweek.
An employee claimed that his employer used a fixed workweek to avoid paying maximum overtime.
The employer claimed that it calculated the employee's overtime correctly according to regulations under the Fair Labor Standards Act. According to the law, a workweek is a fixed and regularly occurring period of 168 hours--seven consecutive 24-hour periods that can start and end on any day. “Once the beginning of the workweek is established, it remains fixed regardless of the schedule of hours worked by him,” FLSA regulations say.
ISSUE:Did the employer miscalculate the employee's overtime by using a fixed workweek?
DECISION: The employer calculated the employee's overtime correctly according the FLSA, a New Mexico appeals court ruled in affirming a state district court's ruling.
The court had to interpret the spirit of the state law because it was not specific when it referred to “any week of seven days,” the court said. While the employee said that “any week of seven days” should be interpreted as the seven-day periods he would work, the employer said it should mean the fixed seven-day period as indicated under the FLSA.
The employer's use of a fixed workweek did not violate the purpose of state law, which was to “protect workers' health and well-being by ensuring that workers are paid a premium for hours worked beyond the number of hours deemed to be a reasonable maximum per week,” the court said. There was no reason for the court to interpret state law to mean anything other than that stated by the FLSA, it said. “The FLSA regulations' requirement of a fixed workweek does not do violence to either the language or purpose” of the state law, the court said.
The employer did not manipulate the fixed workweek in order to avoid paying the maximum amount of overtime, the court said. Furthermore, a fixed workweek does not necessarily always benefit the employer, it said. Sometimes, such as when an employee works 30 hours in one week and 50 hours in the next, the employee benefits by receiving 10 hours worth of overtime pay even though the total is 80 hours over two weeks, it said.
Employers can establish fixed workweeks “in order to have predictability and certainty about payrolls,” the court said. As long as the employer pays time and one-half for hours worked in excess of 40 per week, as indicated by the FLSA, the employer complies with state law, the court ruled (Sinclaire v. Elderhostel Inc., N.M. Ct. App., No. 30,089, 8/13/12).
POINTERS: Under the FLSA, each workweek is considered on its own for overtime calculation. A workweek generally must be a fixed period, adjustable only if the change is designed to be permanent. It does not have to coincide with the calendar week and can begin any day of week. Payment on a daily, biweekly, monthly, or a piecework basis does not affect the workweek basis of overtime computation.
For more information, see PAG's “FLSA Overtime Compensation” chapter.
By Allison M. Gatrone
The preceding case discussion illustrates how courts resolve pay-related disputes. The names and dialogue are fictitious.