Q&A: Do We Have to Pay Overtime?

The Fair Labor Standards Act does not allow averaging of hours over two or more weeks.

A question has come up in our church regarding overtime pay. We have a two-week payroll period, and we have a salaried, nonexempt employee who would like to work fewer hours in the first week of each pay period and additional hours in the second week to bring her total hours to 80. For example, she would work 30 hours in the first week, and 50 hours in the second week. Since she works no more than 80 hours for the two-week pay period, is she entitled to overtime for the additional ten hours worked in the second week? Some in our church say that she is, while others say that she is not.
The Fair Labor Standards Act takes a single workweek as its standard and does not permit averaging of hours over two or more weeks. Thus, if an employee works 30 hours one week and 50 hours the next, he must receive overtime compensation for the overtime hours worked beyond the applicable maximum in the second week, even though the average number of hours worked in the two weeks is 40. This is true regardless of whether the employee works on a standard or swingshift schedule and regardless of whether he is paid on a daily, weekly, biweekly, monthly or other basis. 29 CFR 778.104.
Similarly, the Department of Labor, in an official ruling, stated:

The workweek is a fixed and regular recurring period of 168 hours—seven consecutive 24- hour periods. The workweek is established by the employer and need not be the same as a calendar week. A workweek may be established for all employees or different workweeks may be established for different employees or groups of employees. Once an employee’s workweek is established, it remains fixed, and may only be changed if the change is intended to be permanent and is not designed to evade the overtime provisions of the FLSA. Further, each workweek stands alone and averaging of hours over two or more weeks is not permitted. This is true whether an employee works on a standard or swing-shift schedule. Therefore, hours worked and compensation earned must be determined on a workweek basis. Though compensation due an employee must normally be paid at the time of the employee’s regular pay period, the Wage and Hour Division has no objection if an employer pays in advance the compensation that the employee will be due in a subsequent pay period by including all hours worked in a single shift in the workweek in which that shift began. However, employees must always be paid time and one-half their regular rate of pay for each hour actually worked over 40 hours in the workweek and the employer must not manipulate the schedule in order to avoid the overtime pay requirement of the FLSA.

Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

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