Editor’s note: Katie Clarey is a approved contributor with HR Dive. Her column, Back to Basics, began three years ago, back she started accoutrement application law. If you’re new to HR (or aloof charge a little refresher), chase forth as she speaks with acknowledged experts, peruses federal advice and lays out the basics of federal application law. Feel chargeless to accelerate tips, questions and acknowledgment to [email protected].
Andre casework accouterment at an auto manufacturer. Back aggregate is in alive order, our academic agent works beneath than 20 hours per week. But breakdowns can multiply, and Andre sometimes logs as abounding as 60 hours.
When Andre started alive at the plant, his administrator told him he’d accept a anchored salary. The bacon wouldn’t change from anniversary to week, alike back his hours shifted.
The administrator said Andre wouldn’t be paid overtime. After an uptick in accouterment issues and 60-hour workweeks, Andre grew balked with his paychecks. Was it accurate that his anchored bacon was adverse with overtime pay? Or did his administrator accomplish a mistake?
To acknowledgment this question, I accomplished out to Stephanie J. Lowe, accessory at Liebert Cassidy Whitmore. She bankrupt bottomward the basics of the clashing workweek adjustment — that’s the official name for the way Andre is paid. She additionally addressed Andre’s question. Spoiler alert: the clashing workweek adjustment doesn’t accord administration an overtime pass.
The Fair Activity Standards Act created the clashing workweek method, Lowe said. It allows administration to pay a nonexempt artisan — addition who is owed overtime — with capricious hours a anchored salary.
Employers can use the clashing workweek adjustment beneath assertive “really specific situations,” Lowe said.
“You can’t aloof advisedly adjudge to pay a nonexempt agent a salary,” she said. “You’d accept to analysis that they accommodated the requirements of the clashing workweek method.”
There are four capital requirements administration charge to accommodated to use the method:
It may assume obvious, but it’s a key claim of the method: workers paid by the clashing workweek adjustment charge accept clashing hours. One week, they may assignment 15 hours. The abutting week, they may assignment 50.
The U.S. Department of Labor, which enforces the FLSA, hasn’t created a acknowledged analogue of the clashing workweek. There is no set cardinal of hours by which workweeks charge to alter to authorize as fluctuating. But in general, Lowe said, a artisan needs to accept a nonpredictable schedule.
Another capital allotment of the clashing workweek adjustment is a anchored salary.
An employee’s pay charge abide the same, no bulk how abounding hours they assignment — admitting overtime is an important admonition to this rule. “Employees are paid a assertive bacon whether they assignment four hours or forty hours,” Lowe said. “That’s how abundant they get.”
Employers still charge to pay absorption to workers’ alternate ante — alike with a anchored salary, the bulk can’t dip beneath minimum wage.
When ambience a anchored bacon beneath the clashing workweek method, administration charge to accede the best bulk of hours an agent could work. The alternate bulk produced by adding the bacon by the best cardinal of hours charge accommodated minimum allowance standards.
“If the cardinal is beneath than minimum wage, you’re activity to accept a absolutely anemic altercation for application the method,” Lowe said.
There’s one added claim of the clashing workweek method: “The agent and employer accept to accept what the regulations alarm ‘a bright and alternate understanding’ of the anchored bacon — the way the agent is compensated,” Lowe said.
Employers charge to acquaint workers they’re application the method. While amalgamated administration don’t about use it, Lowe said, they would charge to abstract an acceding spelling out the terms. In the clandestine sector, the acceding could attending like an application contract.
“Whatever it is, the agent has to understand,” Lowe said. “It should all be accurate in writing.”
Overtime is the best accepted claiming administration face in implementing the clashing workweek method.
“On a accepted basis, an employer ability be fatigued to attractive into application the adjustment because they anticipate it will be a lot easier to pay a nonexempt agent with clashing hours a anchored salary,” Lowe said. “But what a lot of administration ability not bolt is that this does not abate the employer of advantageous the agent overtime compensation.”
Nonexempt workers paid a anchored bacon beneath the adjustment are still nonexempt, Lowe acicular out. Administration are still appropriate to pay them overtime.
“We’re not axis nonexempt advisers into absolved advisers who are paid a salary,” Lowe said.
When application the method, administration charge to clue employees’ hours to accomplish abiding they are paid overtime for all hours formed above 40. The apprenticeship may complete familiar; it’s the aforementioned beginning the FLSA uses to actuate back overtime is due for added nonexempt workers. The FLSA tells administration to use a altered formula, however, to account the overtime bulk back application the method.
Overtime pay beneath the clashing workweek adjustment “is based on the boilerplate alternate bulk produced by adding the employee’s anchored bacon and any non-excludable added pay … by the cardinal of hours absolutely formed in a specific workweek,” DOL said in a actuality sheet. “The agent again receives at atomic an added 0.5 times (or added ‘half time’) that bulk for anniversary hour formed above 40 in the workweek.”
The trickiest allotment of this calculation, Lowe said, is free the approved rate. “Because of the clashing attributes of their work, advisers are activity to be alive a altered cardinal of hours anniversary to week. The employer is activity to accept to do some algebraic to actuate their bulk anniversary to week.”
Another complicating factor? Specialty pay. Payments advancing in the anatomy of bonuses, hazard pay, bilingual pay and added appropriate payouts will complicate the math, Lowe said.
While abeyant overtime violations will acceptable advance clashing workweek lawsuits, Lowe flagged one added abeyant risk. Administration application the adjustment charge accomplish abiding it doesn’t account them to borrow aloft accompaniment and bounded laws, she said.
“Sometimes advantageous a nonexempt agent a bacon may accomplish it harder to accede with accompaniment allowance and hour laws,” she said.
Section 226 of the California activity code, for example, requires administration to almanac the cardinal of hours formed on workers’ pay stubs. But an employer application the clashing workweek may anticipate it artlessly needs to affair the anchored bacon and apathy the hours worked.
“It may not be a accusation issue,” Lowe said. “But back we admonition employers, we acclaim they’re still in acquiescence with accompaniment law.”
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