U.S. District Court Holds "Fluctuating Workweek" Impermissible Under Pennsylvania Law
The employment law attorneys at Kennedy Hodges L.L.P. discuss a recent court case in which the US District Court for the Western District of Pennsylvania held that the fluctuating workweek method of calculating overtime pay is not permissible under Pennsylvania law.
- Pittsburgh, PA (1888PressRelease) October 23, 2012 - The United States District Court for the Western District of Pennsylvania recently held that the "fluctuating workweek" method of calculating overtime pay is not permissible under Pennsylvania law when the employer pays an overtime premium of one-half of the employee's hourly rate in addition to the employee's salary. Foster v. Kraft Foods Global, Inc., No. 09-453 (W.D. Penn. Aug. 27, 2012).
Federal law requires employers to pay most employees at least one and one-half times their regular rate of pay for all hours worked over 40 in a workweek. This is referred to as overtime pay. Federal law also authorizes an employer to use the fluctuating workweek method of calculating overtime compensation. Under this method, an employer pays an employee a fixed weekly salary, regardless of the number of hours the employee worked. Each week, the salary is divided by the number of hours worked during the week to determine the employee's regular rate of pay. Because the fixed salary is designed to compensate the employee upfront for some overtime work, the employee is paid just one-half the regular rate for every hour worked over forty, instead of one and one-half times the regular rate. The more overtime the employee works, the less the employee is compensated for each additional hour.
The Court had to resolve whether the Pennsylvania Minimum Wage Act authorizes employers to use the fluctuating workweek method when calculating overtime pay. The Court determined that a plain reading of the state statute requires employers to pay employees at a rate not less than one and one-half times the rate established by the parties as the basic rate. The Court thus concluded that calculating overtime pay with the fluctuating workweek method is impermissible under Pennsylvania law.
This opinion may dramatically impact how employers in Pennsylvania pay their employees. If you feel that you have been paid unfairly, contact the employment law attorneys at Kennedy Hodges at 888-449-2068 or visit http://www.texasovertimeattorney.com for more information.
About Kennedy Hodges L.L.P.: Kennedy Hodges, L.L.P. is a plaintiff-oriented law firm that provides nationwide representation to employees in lawsuits against their employers. Many of these lawsuits concern wage and hour violations. If you feel that your rights to fair compensation have been violated, contact our office today.
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