Deductions for missing work can cause overtime problems for employers

Being able to go to the dentist, the doctor, take off for vacation or just being able to rest if you are sick is impossible if an employee cannot take off during the week without having their pay reduced. If an employee takes off work for personal reasons, vacation, or sick days, and their pay is docked as a result, is that employee subject to overtime pay under the fluctuating workweek (“FWW”) method? FWW means that the employee works different hours every week, getting paid a set salary regardless of the number of hours actually worked.  

An employer using the FWW method of calculating overtime, which is allowed under the Fair Labor Standards Act (“FLSA”), arises if a non-exempt employee has hours of work that fluctuate from week to week, and the employer and employee have an understanding that the employee will receive a fixed salary, paid as straight time for all hours worked. Specifically, there are five conditions for application of a FWW arrangement: (1) the employee’s hours must fluctuate from week to week, (2) the employee must receive a fixed salary, (3) the salary must meet the minimum wage standards, (4) the employee and the employer must have a clear mutual understanding that the salary (not including overtime premiums) is fixed regardless of the number of hours the employee works, and (5) the employee must receive overtime compensation for hours worked in excess of forty hours, not less than one-half the rate of pay.

Courts have held that the FWW is not applicable if the five prerequisites above are not met. An employer using the FWW method may not make deductions from an employee’s salary for absences occasioned by the employee, meaning the employee takes off work for their own reasons. This includes deductions for illness, sick leave, and personal business reasons. An employer is allowed to make full-day deductions for an exempt employee’s pay for full-day absences resulting from sickness if the deduction is made in accordance with a policy, even when an employee has exhausted his or her leave. Full day deductions for sick days are not allowed for salaried, nonexempt employees under the FWW method. Simply put, an employer may deduct  days from a FWW employee’s vacation bank for workdays missed, but may not deduct money from the fixed salary for time an FWW employee misses from work. Brumley Camin Cargo Control, Inc., No. 08-1798 (D.N.J. April 22, 2010)

To illustrate this, the inspectors in Brumley often logged many hours above and below the forty hour minimum, sometimes leaving work for personal reasons. Id. The Defendant, Camin, samples, inspects, tests and certifies petroleum products at U.S. market ports of entry. Camin used the FWW method to pay its inspectors, but excluded from the pay any additional holiday and vacation day payments. Id. The court denied summary judgment to the employer where it had docked their employees’ pay for absences. The Court granted summary judgment to the Plaintiffs on the FWW inapplicability because the employer provided “holiday pay” and “day off pay.” Id. 

The court held that plaintiffs were entitled to payment at the one and half rate because the prerequisites for application of the FWW method were not met. Specifically, the court held that the record “demonstrates that Plaintiffs’ compensation for non-overtime hours varied, depending upon earned offshore pay, holiday pay or day-off pay.” Id. Due to such payments, Plaintiffs cannot receive the fixed salary required to apply the FWW method.” Id. Take note though that a disciplinary deduction from an employee’s salary for willful absences or tardiness would be permitted under the FWW method, but only if the deduction does not result in the pay dipping below minimum wage and does not cut into overtime. 

Have you taken off work for personal reasons and had your pay docked because of it? If so, you may have a claim to recover your unpaid overtime if your employer only pays you “half time” for overtime pay. Consider speaking with an experienced overtime attorney who handles situations just like yours. Josh Borsellino is an experienced overtime attorney licensed in Texas that represents workers who hav been unfairly paid because of their fluctuating hours. Josh accepts overtime cases on a contingency basis, meaning that he only gets paid if money is recovered from the company being sued. Josh provides free consultations and can be reached at 817.908.9861 or 432.242.7118.

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