Enter to open, tab to navigate, enter to select
Workweek Change to Reduce Employees' Overtime Does Not Violate FLSA: Eighth Circuit
Practical Law Legal Update 7-521-8038 (Approx. 4 pages)
Workweek Change to Reduce Employees' Overtime Does Not Violate FLSA: Eighth Circuit
by PLC Labor & Employment
| Published on 11 Oct 2012 • USA (National/Federal) |
The US Court of Appeals for the Eighth Circuit ruled in Abshire v. Redland Energy Services, LLC that an employer did not violate the Fair Labor Standards Act (FLSA) when it changed the workweek designation for certain employees in a manner that reduced their overtime hours.
On October 10, 2012, the US Court of Appeals for the Eighth Circuit issued an opinion in Abshire v. Redland Energy Services, LLC, holding that an employer did not violate the FLSA when it changed the designated workweek for certain employees in a manner that reduced their overtime hours.
Redland Energy Services, which drills and services natural gas wells, employs crews of drill rig operators who work 12-hour shifts for seven consecutive days, followed by seven days off. Drill rig crews work Tuesdays through Mondays, and were paid overtime based on a Tuesday-to-Monday workweek. A Sunday-to-Saturday workweek was used for Redland's other employees, who worked a traditional Monday-to-Friday schedule.
In 2009, Redland changed the designation of the workweek for drill rig crews from Tuesday-to-Monday to Sunday-to-Saturday. Because the drill rig crews continued to work the same schedule, this change resulted in them working fewer overtime hours. Five employees filed suit against Redland, arguing that the workweek change violated the FLSA. The district court granted Redland's motion for summary judgment.
On appeal, Redland presented evidence in support of its motion that putting all employees on the Sunday-to-Saturday workweek:
- Increased efficiency by reducing the time spent preparing payroll.
- Decreased payroll expenses by reducing the number of overtime hours worked by the drill rig crews.
In response, the employees argued that:
- The FLSA prohibits an employer from changing an existing workweek for the purpose of reducing employee overtime.
- Redland's true purpose in making the change was to reduce overtime.
- Redland's claim of administrative efficiencies was pretextual.
The Eighth Circuit rejected the employees' argument that the workweek change violated the FLSA and affirmed the district court's judgment, holding that:
- Under the FLSA and DOL regulations, an employer may change an existing workweek designation if the change is intended to be permanent.
- Although an employer cannot change the workweek designation to evade the FLSA's overtime requirements, a permanent change in the workweek intended to reduce overtime hours worked does not violate this prohibition.
- As long as the change is intended to be permanent and otherwise consistent with the FLSA, the employer does not need to have a "legitimate business purpose" in implementing the change.
In reaching its conclusion, the court relied heavily on DOL regulations stating that a workweek may begin on any day and at any hour of the day, and on federal and state court decisions interpreting this language to mean that employers are not required to designate workweeks to maximize overtime pay. In light of these decisions, the court found that changing a workweek from one lawful arrangement to another, even if it reduces overtime hours, does not constitute an evasion of the FLSA's overtime requirements.
For employers, the Eighth Circuit's decision clarifies that workweek changes will not be found to violate the FLSA if they are intended to be permanent and are implemented in accordance with the FLSA. As long as these two conditions are met, an employer's reasons for making the change are irrelevant to determining whether an FLSA violation exists.
Court documents: