Workweek Change Does Not Violate FLSA
According to the Eighth Circuit Court of Appeals, a natural gas company did not violate the federal Fair Labor Standards Act (FLSA) when it changed the workweek for calculating overtime for rig operators to reduce payroll costs. Abshire v. Redland Energy Services, LLC (8th Cir. 2012).
In this case, rig operators worked 12-hour shifts for seven consecutive days from Tuesdays through Mondays, and then had seven days off. Redland used a Tuesday-to-Monday workweek to calculate overtime owed to these employees, resulting in extensive amounts of overtime each pay period. However, the company used a Sunday-to-Saturday workweek for its 20 other employees, who worked traditional Monday-to-Friday schedules. In May 2009, Redland changed the designation of the rig operators’ workweek to the Sunday-to-Saturday workweek used for other employees. This change split the rig operators’ work hours into two workweeks, reducing the amount of overtime owed. After Redland announced the change, five rig operators sued.
The Eighth Circuit held that the FLSA does not require employers to choose a workweek that “maximizes an employee’s accumulation of overtime pay,” and said, “An employer’s effort to reduce its payroll expense is not contrary to the FLSA’s purpose.”
This case reminds us that the FLSA permits employers to designate the workweek that is used to calculate overtime for nonexempt employees. The workweek can be any fixed and regularly recurring seven-day, 168-consecutive-hour period. The workweek can even be different for different types of employees. And, employers can change the workweek prospectively, if the change is intended to be permanent and not designed to evade overtime requirements. Many employers have nonexempt employees working compressed schedules like this company. They may wish to designate a workweek that results in reduced overtime.