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FLSA Does Not Prohibit Change to Workweek Intended to Reduce Overtime Liability

    Client Alerts
  • October 26, 2012

The Fair Labor Standards Act requires employers to adopt a standard workweek, but does not specify when one week must end and the next begin. Earlier this month, the Eighth Circuit Court of Appeals confirmed the ability of an employer to change the workweek, even if the change is intended to reduce overtime exposure.

In Abshire v. Redland Eng. Servs. LLC, the employer moved from 12-hour shifts to a modified regular weekly schedule. The company then split the calendar week for payroll purposes, having the workweek begin and end on Tuesdays. The effect of this change was to reduce overtime that would have been payable if the workweek matched the calendar week. Several employees sued, claiming that this change was an impermissible attempt to evade FLSA overtime requirements.

The Eighth Circuit rejected the claim, affirming summary judgment for the defendant. The court noted long-standing FLSA precedent confirming that employers have the flexibility to establish the workweek as they choose, and that their motivation for doing so is not legally relevant. Structuring the workweek to avoid overtime is not the same as evading the FLSA's overtime requirements.

FLSA rules and decisions even allow employers to begin and end the workweek in the middle of an employee's shift. The change in workweek must be intended to be permanent, meaning that the employer cannot repeatedly manipulate it to defeat overtime accrual. Also, Department of Labor rules which govern the transition process require that overtime be calculated on a basis favorable to employees during the workweek transition itself. While such changes may not be popular among employees, they remain an option for employers seeking to minimize overtime exposure.