FLSA minimum wage compliance is based on workweek, not hour
The U.S. Ninth Circuit Court of Appeals recently ruled that minimum wage compliance under the federal Fair Labor Standards Act (FLSA) is based on the workweek, not the hour.
Details of the Ruling
Customer service employees at a call center earned different rates of pay depending on their tasks. The company used a workweek average to determine the employees’ wages at the end of the week and if the total amount was less than the minimum wage, the company corrected it by adding subsidy pay. The employees filed a lawsuit together for minimum wage violations under the FLSA, claiming that they should be compensated on an hour-by-hour basis, not a weekly average.
Because the wording in the FLSA statute doesn’t specifically explain whether minimum wage is to be calculated by the workweek or the hour, the court followed the U.S. Department of Labor (DOL)’s practice and ruled that the workweek calculation was acceptable. The court also took into consideration the history of other circuit courts of appeal allowing the per workweek calculation (Douglas v. Xerox Business Services, LLC, 9th Cir, Nov. 2017).
Tips for Employers
If you have employees who are paid based on a commission, per mile, or piece-rate basis, be sure that they are receiving at least the minimum wage for each workweek (at the federal or state/local rate, whatever is highest) unless they qualify for an exemption from minimum wage requirements. Be aware, however, that California and Washington have stricter rules regarding compensation for piece-rate workers which require separate per-hour calculations for non-productive time. For more information, see our Legal Guide, “Piece-Rate Method of Compensation.”
For specific questions about wage and hour laws or any employment-related concern, please contact your Vigilant employment attorney. Not a Vigilant member? Contact us to discuss how we can help you address tricky employment law issues under a flat monthly fee.