Employers Need Not Designate Workweek to Maximize Employees’ Overtime

In Johnson v. Heckmann Water Resources Inc. (5th Cir. 2014), the Fifth Circuit Court of Appeals addressed whether an employer must align its designated workweek for purposes of calculating overtime under the Fair Labor Standards Act (FLSA) with an employee’s work schedule to maximize an employee’s overtime earnings. The court found “the mere fact that an established workweek does not maximize an employee’s overtime compensation does not, standing alone, violate the FLSA.”

In this case, Heckmann has established a Monday-through-Sunday workweek. The two employees involved in this case, Smith and Johnson, were assigned to work 12-hour shifts over seven consecutive days beginning every other Thursday. Smith started his shift at 6 a.m. Johnson started his shift at 6 p.m. Smith and Johnson argued they each would have earned approximately 44 hours of overtime in a two-week pay period if its designated workweek was defined as Thursday to Wednesday. However, under the Monday-to-Sunday workweek, they received only four to eight hours of overtime pay.

The court noted, under FLSA regulations, a workweek may begin on any day and at any hour of the day, so long as it is a fixed and regularly recurring period of 168 hours—seven consecutive 24-hour periods. Heckmann complied with the FLSA even though its designated workweek does not maximize employees’ overtime compensation.

Most employers designate their workweeks for overtime purposes as Saturday to Sunday. But, it does not have to be that way. Employers can designate their workweeks to fit their business needs including to minimize the obligation to pay employees overtime. Employers can even designate different workweeks for different employees or groups of employees. For example, employers may wish to designate a workweek that minimizes overtime when entering into compressed workweek arrangements such as 4-day/10 hours, 3-day /12 or 12 1/2-hours, or 9-day/80 hours (be aware of state overtime requirements). Or employers whose employees work most of their hours on the weekend may want to designate the workweek to begin on Fridays so the employer can adjust an employee’s hours later in workweek, when the workplace is not as busy, to not be more than 40 hours.

The FLSA allows employers to change their workweeks if the change is intended to be permanent and is not done to evade overtime requirements. Read our FYI on Overtime for more information. We recommend that employers communicate their designated workweeks to employees in their handbooks or other documents. Click here for samples.