This company managed to cut its overtime payout by more than 50% by changing its payroll workweek — and managed to do so without violating the Fair Labor Standards Act (FLSA).
Drill rig employees for Redland Energy Services worked a schedule of seven consecutive 12-hour days, followed by seven consecutive days off. Under that schedule, staffers worked 88 hours every week, netting 44 OT hours.
In 2009, the firm decided to alter its payroll workweek. Employees would still work the same days, but the payroll workweek would be split, reducing each workers’ OT to 20 hours per week.
The drill rig workers sued, claiming the FLSA prohibits firms from changing an existing workweek to reduce OT.
Not so fast, said the court: The FLSA wasn’t designed to “maximize the payment of overtime.”
As Maria Danaher noted on Employment Law Matters, as long as the change is permanent, it’s OK – especially because the modification also increased efficiency by reducing payroll calculation time.
The case is Abshire v. Redland Energy Services.