FLSA regulations may not calculate a 40-hour workweek the same way

by on March 27, 2009 · 0 Comment POSTED IN: HR Info Center

Not a ‘good-faith’ violation, but a ‘willful evasion,’ of FLSA compliance

Imagine you have an employee putting in 25 hours a week. There’s no way you’d pay him overtime, right? Don’t be so sure.

Here’s a case that underscores how FLSA regulations defines an employer– and it may surprise you.

The case

A court agreed that two home-health agencies whose operations were closely coordinated existed as two separate companies on paper and for tax purposes – but as a single enterprise under FLSA regulations.

The agencies had no formal arrangement for sharing employees: Workers were interviewed separately, required to sign separate employment agreements and handed two separate checks each payday.

However, the agencies regularly transferred patients from a facility owned by one to a facility owned by the other. In doing so, they offered a continuity of care that was achieved by requiring employees to divide their time between the two agencies.

But when employees who worked more than a combined 40 hours requested overtime pay, they were told that to qualify for overtime they would have to work more than 40 hours at one of the agencies during one pay week, and that the hours couldn’t be combined.

Employees cried foul and went to the DOL, which filed a lawsuit under FLSA regulations.

Not only did the court find in favor of the workers, but it rejected the agencies’ “good-faith defense,” calling their actions a “willful violation” of FLSA compliance that appeared “to have been made to evade the FLSA, not to comply with it.”

Cite: Chao v. A-One Medical Services

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