Employees get paid overtime when their work hours exceed forty in a “workweek.” This is a simple, yet complicated concept that is essential for employers to understand and be aware of. I read an interesting article about this concept in a recent Epstein Becker blog post. Simply stated, a workweek as defined under the FLSA, is “a fixed and regularly recurring period of 168 hours – seven consecutive 24-hour periods.” As the post notes, it need not be tied to a calendar week or hours of operation. Once it is set, it cannot be changed, with a few exceptions.
One important fact is that an employer can use different workweeks for different groups or classifications of employees or even for a discrete single employee. The employer has the freedom to change the workweek, as long as the change is permanent and it is not being done to avoid paying overtime to employees. It is always better to base such a change on some business-based, objectively verifiable reason to avoid allegations of impropriety but there is no legal compulsion to provide such a reason.
There are situations when the employer changes a workweek and there is some overlapping between the old and new work weeks. The Epstein blog post posits a scenario in which the employer’s old work week started on Mondays, 7AM, and then the week changed to start on Sundays at 7AM. The twenty-four hours between Sunday and Monday then fall into both weeks and overtime computation might be a problem.
The USDOL will find the employer in compliance with overtime rules if it includes the overlapping hours as hours worked only in the “old” workweek and then calculating straight time hours and any overtime hours in that week. The employer may also choose to include the overlapping hours in the “new” workweek and then do the same computations of straight time and overtime hours for each of the weeks and make the appropriate computations.
Interestingly, as the Epstein post notes, and which surprised me, there is no legal compulsion to notify the workers of the work week change. Not that they will not notice (obviously). The answer is simple—provide a notice equal to the pay period (e.g. if pay bi-weekly, give two weeks’ notice). The last thing employees want is to be (totally) surprised by a change in employer practice that affects (or might affect) their pay. It is also good employee relations, which we are all striving to facilitate. The notice should explain the mechanics of the change and its effective date.
This is a usually a mundane issue but it can affect an entire workforce. The key takeaway I think is the employee relations aspect of it. It is very important to keep the workforce informed, especially about compensation issues.