The Eighth Circuit Court of Appeals (which covers Minnesota) ruled that the Fair Labor Standards Act ("FLSA") does not prevent an employer from altering its designated workweek to minimize the potential for employee overtime.
The employees of Redland Energy Services in Arkansas worked seven, twelve-hour shifts, followed by seven consecutive days off. In May of 2009, Redland changed the standard workweek to from Tuesday through Monday to Sunday through Saturday. The employees sued, arguing that this caused them to earn less overtime even though they were working the same number of hours. In effect, they contended that any change designed to reduce overtime liability was a violation of the FLSA.
The trial court dismissed the employees’ claims and the Eighth Circuit affirmed in the case of Abshire v. Redland Energy Servs., LLC, No. 11-3380 (Oct. 10, 2012).
Overtime Provisions at Work
Since employees generally must be paid overtime for working more than 40 hours in a workweek, it is critical to know just what a workweek actually is. Department of Labor regulations, 29 C.F.R. § 778.105, define a workweek to be:
[A] fixed and regularly recurring period of 168 hours—seven consecutive 24-hour periods. It need not coincide with the calendar week but may begin on any day and at any hour of the day. . . . Once the beginning time of an employee’s workweek is established, it remains fixed regardless of the schedule of hours worked by him.
The appeals court noted first that the FLSA does not prevent employers from selecting a designated workweek that results in employees earning fewer overtime hours than if the workweek was “better” aligned with their shift schedules. In short, the law does not restrict the employer’s initial establishment of its workweek. Subsequently, if a change is to be made, the DOL regulations state that the change must be “permanent and . . . not designated to evade the overtime requirements of the Act.”
The Eighth Circuit observed that the employees’ chief complaint was that Redland intended to reduce the amount of overtime due to them under federal law. Perhaps so, but the court concluded that it was never the original purpose of the FLSA to “maximize the payment of overtime” to employees. Rather, “[s]o long as the change is intended to be permanent, and it is implemented in accordance with the FLSA, the employer’s reasons for adopting the change are irrelevant.”
The FLSA does not mandate that employees be paid as much overtime as possible; it merely requires that overtime be paid when it is earned. While an employer may not make a series of changes that constantly evade the overtime requirement, a decision to implement a permanent change in the workweek to minimize labor costs is perfectly permissible under the law.