What You Need to Know About the Fluctuating Workweek in Tennessee

If you’re a victim of “Chinese Overtime” let an experienced lawyer protect your rights from offices serving Nashville, Chattanooga, Memphis, and Jackson

The usual method of calculating overtime for a non-exempt employee who works at a regular hourly rate of pay is straightforward. Once the employee has worked forty hours in a workweek, any additional hours (“overtime”) worked during that week are paid at the rate of one hundred and fifty percent of his or her regular hourly rate—so called “time and a half.” But, the Fair Labor Standards Act (FLSA) allows an alternative method of paying non-exempt employees whose hours of work vary unpredictably from week to week.

The “fluctuating workweek” method of pay is a special arrangement between employer and employee that can be advantageous to both, although not simultaneously. It can also cause variations in the rates of overtime that can be problematic.

If you are a non-exempt worker whose hours fluctuate and you find that your hourly compensation at the end of some weeks comes uncomfortably close to or even below the federal or your state minimum wage, you should seek the counsel of an experienced Tennessee wage and hour attorney at Gilbert Russell McWherter Scott Bobbitt, PLC. The attorneys at The Firm have the collective experience of more than eighty years advocating for employees’ workplace rights. If you have a case, let us help you.

Exactly what is “Chinese overtime”?

In some jobs,  busy weeks require more hours while slow weeks require fewer hours. Sometimes, in order to provide a fairly consistent level of income to non-exempt employees whose hours fluctuate, an employer will pay them a fixed weekly salary regardless of how many hours they work, plus overtime for hours in excess of forty per week. As a result, their base salaries will be the same each week even though their hours may be less or more than the previous week. During slow times, an employee may work thirty or thirty-five hours, which in effect causes his hourly rate of pay to increase. In busy times the same employee may work forty-five or fifty hours, causing his hourly rate of pay to decrease. But what is the effect on overtime pay? Actually, the longer the workweek, the lower the hourly rate on which overtime is computed.

To illustrate this as simply as possible, suppose Andy and Bob are two non-exempt employees. Andy is paid at the rate of sixteen dollars per hour while Bob is paid a salary of $640 per week. If Andy works 50 hours in a week, he receives forty hours’ base pay at $16 and ten hours’ overtime at $24. The $640 base pay plus $240 overtime pay gives Andy $880 for the week.

Bob has been receiving a weekly check of $640. If he works 50 hours, his hourly rate is $12.80, which makes his overtime rate $19.20 per hour. Between his base salary of $640 and $192 for his 10 hours’ overtime, Bob earns $832 for the week, or $48 less than his co-worker.

There are restrictions of course. The employer cannot arbitrarily set Bob’s weekly schedule at 75 hours to further reduce his overtime rate if Bob has never worked that number of hours. The method also becomes problematic when Bob’s salary is fairly low, since dividing by a substantial number of weekly hours could conceivably drive his base hourly rate below the minimum wage. Suffice it to say that the fluctuating workweek method provides employers with numerous opportunities to commit unfair practices, especially when the number of busy periods far outweighs the number of slow periods.

The attorneys at The Firm have an enviable record of success advocating for employees’ rights in the workplace. With more than eighty years’ collective experience and licensure to practice in both federal and state courts, we represent our clients with equal skill and determination before both federal and state wage and hour regulatory agencies.

If you are at a disadvantage because of a “Chinese Overtime” arrangement, let a Tennessee attorney help

If you believe your fluctuating workweek compensation arrangement unfairly favors your employer, we want to hear from you. Please call 888.354.FIRM (3476) to discuss your complaint with an experienced Tennessee wage and hour lawyer, or fill out our contact form to schedule a free, no-obligation consultation. The Gilbert Firm’s offices are conveniently located in Nashville, Chattanooga, Memphis, and Jackson.