According to the U.S. Department of Labor, a workweek is a regularly recurring period of 168 hours (seven consecutive 24-hour periods). A workweek does not have to follow a standard calendar week. It can start on any day of the week and at any time, giving you flexibility to create a workweek that meets your business’s needs. For example, a workweek could start on Tuesday at 12 a.m. and end on Monday at 11:59 p.m.
A workweek is a fixed period of time. It cannot be moved to avoid paying overtime, to accommodate large events, or for any other reason. However, you can change a workweek if it is intended to be permanent. You cannot frequently change the start of the workweek.
You can create different workweeks for different employees, groups of employees, and business locations. This can be beneficial if their regular weekly tasks have different timelines. However, creating different workweeks could make your payroll more complicated.
Workweek overtime rules
The main purpose of a workweek is to determine overtime under the Fair Labor Standards Act (FLSA). Under the FLSA, you must pay employees overtime pay (time and one-half of their regular pay) for any time they work over 40 hours in a workweek. Any overtime pay earned during a workweek must be paid on the normal pay day for that pay period.
When calculating overtime pay, workweeks stand alone. For example, an employee works 35 hours one week and 45 hours the next week for a total of 80 hours. Even though the total hours averages to 40 hours worked each week, the employee must still be paid for the five overtime hours worked during the second week.
You should also let your employees know when the workweek begins and ends so they are aware of when they start working overtime hours.
Some states have their own overtime laws. If you are in a state that has overtime laws, the higher rate of overtime pay will apply.
Changing a workweek
You cannot change a workweek to avoid paying overtime hours. Changing a workweek is acceptable if you intend the change to be permanent.
If you do change your workweek, there will be some overlap between the old workweek and the new workweek. If your old workweek started on Sunday at 5 a.m. and your new workweek starts on Saturday at 5 a.m., the hours between 5 a.m. Saturday and 5 a.m. Sunday are part of both the old and new workweeks.
If your employees do not work any hours during the overlap, you determine their pay the same way as you normally would. If your employees do work during the overlap, calculating their pay can be tricky. There are a few steps to follow:
- Calculate the pay for the old workweek, including the overlapping hours. If the employee worked 45 hours plus 5 hours during the overlap, they worked 50 hours during the old workweek. If they are paid $10 and hour, they would be owed $550 (40x$10+10x$15).
- Next, calculate the overlapping hours as part of the new workweek. If the employee worked 30 hours plus the 5 hours during the overlap, they worked 35 hours during the new workweek. They would be owed $350 (35x$10).
- Finally, determine which week will result in the greatest compensation. The overlapping hours should be included in that week. The employee would then be paid for 50 hours for the old work week ($550) and for 30 hours for the new workweek ($300).
A fluctuating workweek does not mean the start of the workweek regularly changes. Instead, it is a method for paying salaried, nonexempt employees that work a fluctuating number of hours each workweek.
Employers have two options to pay their salaried, nonexempt employees for overtime: either pay the regular salary plus time and one-half, or use the fluctuating workweek method. The fluctuating workweek method for determining employee pay works if five requirements are met:
- The employee must work fluctuating hours from week to week.
- The employee must be paid a fixed salary.
- The salary must be large enough to compensate the employee with at least minimum wage for all of the hours worked.
- The employee must earn one-half their regular rate for all overtime hours.
- There must be a clear understanding between the employer and employee.
For example, an employee has a salary of $700 a week. She works 40 hours one week and 50 the next. For the first week, she receives exactly $700 since there are no overtime hours. To determine her pay for the second week, her hourly rate needs to be calculated. Since the salary already covers all hours worked in the week, her salary is divided by the total hours worked. Her hourly rate would be $14 ($700/50). The employee is then due $770 ($700+10x$7) for the second week.
A workweek cannot be changed to accommodate a fluctuating workweek unless it is a permanent change.
Determining a workweek does not have to be difficult, but it is important to do choose it wisely since changing it could cause a payroll hastle.
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