Author: Gilbert McWherter Scott Bobbitt PLC

Well, “Chinese Overtime,” first of all, is a phrase that I’m not terribly comfortable with, because I find it a little culturally offensive, to be candid with you. But in the workplace, employees often refer to “Chinese Overtime” as a way that they’re being paid. What that really means is some employers take advantage of a regulation that allows them to pay half-time to employees who work overtime, rather than time-and-a-half. And I can tell you that the majority of the time that employers try to do that, they do it wrong.

And so, if an employee ever looks at his paycheck, and it looks like he’s getting paid half-time instead of overtime, or if an employee is ever told that he’s being paid what’s called “Chinese Overtime,” I would really encourage that employee to call the Gilbert Firm; let us take a look at the pay practices of the employer, because it may very well be that that employee is not getting paid for all the overtime that they’re owed. / END TRANSCRIPT

How does “Chinese Overtime” work?

The real term for “Chinese Overtime” is fluctuating workweek, and it applies only to certain non-exempt employees. Let us use a very simple example: say you work a job where some weeks are busier than others. During busy weeks, you get 10 hours’ worth of overtime – but during slow times, you’re lucky to hit the 40-hour mark. So, your boss offers to pay you using a fluctuating workweek method: you are paid a set salary for 40 hours, regardless of how many you actually work. But instead of getting time-and-a-half for any overtime, you only receive half-time for those extra hours. And while receiving that extra pay during slow weeks is probably really nice, this method can deny you a substantial amount of overtime pay over the course of weeks, months or even years.

That is why you should contact the Gilbert Firm if you think you may have been denied overtime pay by your employer. Our Tennessee wage and hour attorneys can help you seek the compensation you’re entitled to have. To schedule an appointment with Michael Russell or with any member of our team in Nashville, Chattanooga, Memphis, Jackson or Knoxville, please call 888.996.9731, or contact us today.

December first is almost here, and that means the new salary thresholds are about to go into effect. For a lot of Tennessee employers, this new threshold is worrying: how will they continue to make a profit if they must pay out more overtime? The truth is, there are several ways that employers can protect themselves without hurting their employees (or breaking the law), and one of those methods is by implementing a fluctuating workweek.

If you are an employee, however, you should be on your guard. While “Chinese overtime” can be legal, there are some strict rules in place for implementing it, and you may find that you have been denied fair pay for the work that you do.

Understanding the basics of FWW

Let’s say you have a job that pays you $10 per hour, for 40 hours of work per week. Some weeks, you work 50 hours, and some weeks you only work 20 hours a week; it depends on how busy your job is. Your employer can institute a fluctuating workweek; this will give you a fixed weekly salary, even if you didn’t complete forty hours of work that week. However, if you do extra work, and you go over your 40 hours, the amount of overtime you can collect changes. Instead of the regular time-and-a-half or 150%) that you normally receive for those overtime hours, your boss only must pay you 50% of your hourly pay in overtime wages.

Without a FWW, you might make $400 for 40 hours, $200 for 20 hours, and $550 for 50 hours. With a FFW, you will always make at least $400 a week, but your overtime wages would be a third of what you normally receive, so you’d make $450 for 50 hours’ worth of work.

Identifying potential problems

The fluctuating workweek is great when your job is slow and you work fewer than 40 hours, but it can cost you hundreds or thousands of dollars each year in overtime pay. The following are examples of how employers can misapply the FWW:

• Having a bonus system (like a holiday bonus or shift differential), which means you are not being paid a “fixed salary.”
• Having a limited number of sick days, with your being docked once you exhaust your sick days.
• Instituting unpaid leave polices.

Another serious consideration relates to the federal minimum wage. An employee who works too many overtime hours could see his or her salary dip below that minimum. Workers should also be wary if, suddenly, their employers try to get them to work far more overtime than they usually do. If the most you’ve ever had in overtime was 10 hours in the weeks at the holidays, and now suddenly your boss is scheduling you for 55 hours a week all year ‘round, he or she could be in violation of the Fair Labor Standards Act.

A lot of things are about to change for Tennessee employers in the next month; we don’t want employees to suffer because of it. At the Gilbert Firm, we handle complex wage and hour violations for workers all over the state. To speak with an experienced Tennessee FLSA violations attorney like Michael Russell or Clint Scott, please call 888.996.9731, or fill out this contact form. The Firm maintains offices in Nashville, Chattanooga, Memphis, Jackson and Knoxville.

When you think “global brand,” you think McDonald’s. Their fast food restaurants can be found in 119 countries, and employ more people than any other private employer in the world except Walmart. They are also the face, for better or worse, of a labor movement in this country that asks for real, living wages for their employees. Because approximately 90% of McDonald’s stores are franchises, bringing a claim against the corporate office for wage and hour violations has proved near impossible for decades.

On October 28, 2016, McDonald’s did something it has never done before: it settled a class-action lawsuit for overtime pay (among other issues) to the tune of $3.75 million. CNBC reports “In a filing in U.S. district court in San Francisco on Friday, lawyers representing about 800 employees at five restaurants owned by a single franchisee said Illinois-based McDonald’s would pay the workers $1.75 million in back pay and damages and $2 million in legal fees.” The site Buzzfeed published the full settlement, in case you are interested.

This is an extraordinary move by McDonald’s, a company not known for its willingness to part with money (Stella Liebeck, anyone?). The reason is this: McDonald’s is a franchise corporation, which means that the company can claim (and often does, to much success) no real liability when it comes to how their franchisees behave. In other words, McDonald’s says it should not be held responsible for wage and hour violations by its franchisees because it is not a “joint owner” of the stores in question.

However, agreeing to settle this particular lawsuit would seemingly open McDonald’s up to any new and pending suits that wish for the corporation to share in the responsibility. On their end, McDonald’s spokeswoman Terri Hickey reiterated that this decision to settle does not make them joint owners, and that “We [fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][McDonald’s] entered into this mutually acceptable resolution to avoid the costs and disruption associated with continued litigation.”

What happens now?

According to the court filing, the franchise owners (the Smith family, who had previously settled with this same group for $700,000 last December) must be retrained by McDonald’s “on the use of corporate software designed to ensure compliance with California’s uniquely strict employment laws.”

But there is another issue brewing – one that could use this settlement as a precedent to make a case for joint ownership – with the National Labor Relations Board. Bloomberg reports that “The NLRB determined last year that McDonald’s shares responsibility with franchise owners for managing such employees, a finding that promises to have far-reaching impact on the company and its peers if it survives a January trial. The case, overseen by a labor board judge, involves workers who were allegedly fired or suspended at 29 locations in five states for their involvement in protests and a bid to unionize. Both sides agree the outcome will affect more than a few dozen stores” (emphasis ours).

We will be following this case very closely, and we hope you will check back with us to learn more about it as new details come to light.

If you have been denied overtime pay or unfairly terminated from your job, the Gilbert Firm may be able to help. Our Tennessee wage and hour attorneys represent employees throughout the state. To schedule a consultation with Michael Russell or Clint Scott, please call 888.996.9731, or fill out our contact form. With offices in Nashville, Chattanooga, Memphis, Jackson and Knoxville, we are always nearby when you need us the most.[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]