In a pair of appeals that will have significant implications for employers that utilize the fluctuating workweek (FWW) method of calculating overtime compensation, the U.S. Courts of Appeals for the Second and Sixth Circuits are considering whether the payment of incentive compensation (in addition to fixed weekly salary) is incompatible with the FWW method. Nothing says “no good deed goes unpunished” quite like a claim that the payment of additional compensation invalidates an otherwise lawful compensation plan.
Articles Discussing Overtime Under The FLSA.
Lady Gaga is back in the news, but this time it has nothing to do with her music; just days before trial, the singer — real name Stefani Germanotta — settled a 2011 lawsuit filed by a former personal assistant. It is a case that reminds employers of all sizes that unless their administrative assistants meet all of the requirements of the administrative exemption test, they must be paid overtime under the Fair Labor Standards Act.
On August 16, 2013, the U.S. Court of Appeals for the Fifth Circuit reaffirmed the use of the “fluctuating workweek” method for calculating damages of workers owed overtime pay as a result of misclassification as “exempt” under the FLSA. In Ransom v. M. Patel Enterprises, Inc., the trial court found executive managers of Party City retail stores were misclassified as exempt from the overtime provisions of the Fair Labor Standards Act (FLSA) when the company paid them flat weekly salaries regardless of the hours they worked. On appeal to the Fifth Circuit, the company did not contest the workers’ status under the FLSA, but argued the lower court improperly calculated overtime damages.
Q. An employee works for the company full-time, 7.5 hours per day, 5 days per week, at $20 per hour. To make ends meet, the employee also voluntarily works a different part-time job for the company on Saturdays, usually working an additional 7.5 hours at $15 per hour. The two jobs are completely separate and could just as easily be done by different people. Do we have to pay overtime for the additional hours, and if so how do we calculate the amount due?
Q. We have a number of non-exempt employees who are nevertheless paid a salary. How do we calculate overtime for these employees?
Has something like this ever happened in your organization? You have a solid non-exempt employee working hard on a project. His supervisor is out of town and unreachable. In the supervisor’s absence, to get the job done, he works a few hours of overtime. When the supervisor gets back, he asks if she will approve the extra time he has already worked. The supervisor says yes, but adds that if the employee had asked ahead of time she probably would have told him not to work overtime on this particular project. The employee responds apologetically and says that he won’t put in for the overtime pay.