Four-day school weeks could have FLSA impacts for businesses
The Associated Press reports that more school districts are switching to four-day schedules. Kids love it, of course, and it may be a neat recruiting tool for school districts, but this puts pressure on working parents to arrange for already scarce child care.
We’re presuming the school day isn’t any longer than a normal school day, because we can’t see any teacher, school administrator or bus driver wanting to deal with how those extra school hours will impact already restless kids.
You can adjust parents’ (or any employees’) work schedules to this new normal with no loss of pay, but if they’re nonexempt and can’t work from home, you must also consider your obligation to pay overtime if they end up working longer than 40 hours in a week.
Short workweeks and overtime
Reducing employees’ workweek while keeping employees’ pay steady necessarily affects nonexempts’ straight-time rates, and then their overtime rate.
Here’s how: Speedy hires Pamela at $800 for a 40-hour workweek. Her regular rate is $20 an hour ($800 ÷ 40 hours). If Speedy reduces Pamela’s workweek to 32 hours a week, her regular rate increases to $25 ($800 ÷ 32 hours).
You have two options.
Option #1: Pay covers only the scheduled hours worked
If the employee works longer than their scheduled hours—in this case, 32 hours—but less than 40 hours a week, the FLSA requires you to pay the minimum wage for the excess hours. Considering that no employee would sign onto an agreement like this, you and they will have to agree on how the extra hours will be compensated. Typically, the agreement is to pay at the same rate.
How to figure Pamela’s pay: If Pamela works 41 hours during one workweek, her total pay is $1,037.50:
- $800 ($25 × 32 straight-time hours)
- $200 ($25 × 8 additional straight-time hours worked)
- $37.50 ($37.50 ×1 overtime hour).
Option #2: Pay compensates for all hours worked, up to 40
This option presents a much more traditional understanding of calculating the regular rate and the overtime rate, because you’re dealing with the familiar 40-hour scenario, but there’s a huge caveat: The FLSA considers that the employee will receive their full salary each week any work is performed, without pay deductions for hours not worked in a short workweek.
The regular rate is figured by dividing salary by 40 hours.
How to figure Pamela’s pay: If Pamela works 41 hours during one workweek, her total pay is $830:
- $800 ($20 × 40 straight-time hours)
- $30 ($30 × 1 overtime hour)
Speedy comes out ahead here, but Pamela comes out ahead if, say, she calls in sick one day, as we know she will, since her pay can’t vary.
One more thing
The FLSA doesn’t require you to provide paid time off to employees. So you have to determine how a shorter workweek will affect accruals for paid time off.
Accruals based on hours worked wouldn’t need to be changed. But accruals based on 40 hours a week would be.