Many workers’ work schedules vary from week to week, both in terms of schedules and the total number of hours worked. The law allows employers whose employees work fluctuating workweeks several options for compensating those workers. Other methods for paying fluctuating-workweek employees, however, run afoul of the Fair Labor Standards Act. A knowledgeable Atlanta wage and hour lawyer can help determine if your method is compliant with the law and, if not, what the next steps should be.
While not technically a fluctuating-workweek matter, a recent federal court case from Pennsylvania offers an example of an employer who dealt with an employee’s changing schedule in a way that was permissible under the law.
The employee, S.W., was a direct care worker working for a home care company. Before she started with the employer, she signed a “Rate Sheet” that said her pay would be $11 per hour. The sheet, however, also said that her hourly wage could change if her hours went up or down.
That, in fact, was exactly what happened. When she started her job, the employer assigned her 56 hours per week. Based on that number, the employer modified the worker’s wage and gave her a new Rate Sheet specifying that she’d received $10.25 per hour, plus time-and-a-half for all weekly hours over 40. Eight months after S.W. started, the employer raised her hourly wage to $11 per hour. That “raise” also coincided with a decline in the number of hours the care worker worked per week.
The worker sued, alleging that the employer violated the FLSA. The worker’s case, at its crux, was that the employer had artificially depressed her hourly rate the first eight months because of the amount of overtime she was working, that $11 was always her true “regular rate,” and the employer had illegally underpaid her wages.
The employer, however, prevailed. Past rulings from the U.S. Supreme Court have stated that an “employer and employee are free to establish this regular rate at any point and in any manner they see fit.” That includes, as was the case in S.W.’s lawsuit, an employer and employee who agree to one rate before employment, agree to a lesser rate at the start of employment, then later raise that rate at some future point in the worker’s employment. Even if the employer did drop S.W.’s rate from $11 to $10.25 because she was working 56 hours per week, that would not be an FLSA violation. The Supreme Court’s rulings do not prohibit “an employer from considering potential hours in establishing an initial rate of compensation.”
‘Split-Day’ Techniques are Generally Not Complaint with the FLSA
While that method was legal, here are some examples of techniques that aren’t compliant with the FLSA. One is something called a “split-day” technique. That system entails the employer paying a lower “regular” rate for the first portion of a shift, then a higher “overtime” rate for the remainder, and then not paying time-and-a-half until a worker exceeded 80 hours in a week. Additionally, techniques that pay a nominal hourly rate and a larger “piece rate,” and then pay overtime based only on 150% of the hourly rate also do not satisfy the law.
If you’re an employer whose workers work fluctuating work weeks or you offer “flex pay,” it’s crucially important to be sure your method of paying workers is compliant with the law. Additionally, as a worker working one of those kinds of jobs, it’s equally important to be aware of the FLSA. The knowledgeable Atlanta wage and hour attorneys at the law firm of Parks, Chesin & Walbert are here to help employers and employees alike determine if what they’re doing (or receiving) matches what the law demands and to take the appropriate follow-up actions when it’s not compliant with the law. Contact us through this website or at 877-986-5529 to schedule a consultation.