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Eighth Circuit Court of Appeals Upholds Employer's Right to Change Its Workweek, Even When the Change Impacts Overtime Pay

October 2012

In Abshire v. Redland Energy Servs. LLC, No. 11-3880 (8th Cir., Oct . 10, 2012), the employer permanently changed its workweek designation for certain employees, from Tuesday-to-Monday to Sunday-to-Saturday, in order to coincide with the workweeks used by all other positions. However, the workweek change did not accompany a change in the affected employee's work schedules, resulting in having their schedules split over two payroll periods, reducing the amount of overtime hours those employees would receive. After the change, the employees sued, arguing that the employer's action violated the FLSA because it was designed to evade overtime requirements. In its defense, the employer argued that the change was not designed to evade overtime, but rather it was done to increase administrative efficiency by reducing payroll preparation time and to reduce its overall payroll expense.

The court noted that the FLSA regulations permit an employer to modify the workweek as long as the "change is intended to be permanent and is not designed to evade the overtime requirements of the Act." The court also noted, however, that the FLSA was not designed to maximize the amount of overtime for employees. Rather, the FLSA only requires the "workweek" to be a fixed and regularly recurring period of 168 hours, or seven consecutive 24-hour periods. Therefore, employers are free to use their discretion when determining the day and time the workweek begins. Based on this, the court concluded that a change in the workweek in this instance was nothing more than "an employer's effort to reduce its payroll expense" and therefore "is not contrary to the FLSA's purpose."

Although this case upholds an employer's right to modify the regular workweek in order to minimize the effect overtime may have on the company's bottom line, employers must take great care when modifying pay practices. Slight nuances or varying facts could make your particular situation more prone to an attack under both the FLSA and other areas of employment law. Therefore, it is always best to seek the advice of legal counsel when considering such changes so the facts can be considered and issues can flushed out and thoroughly discussed before a decision is made.

Questions? Please contact WS Attorney at (952) 746-1700, or email chstaul@wesselssherman.com.