Magnolia Woods in Alabama Fined $300K for Overtime Violations

You Don’t Get To Decide How Long A Week Is

Posted on 01-Sep-09 by The Timekeeper

In a case illustrating the importance of making sure you understand the law — or at least consult with someone who does — when setting up your wage and hour policies…

MW Theraputic, operating as Magnolia Woods, an operator of assisted living facilities in Alabama, was reportedly ordered to pay $295,146 in back wages to 105 employees following an investigation by the DOL.

The investigators discovered, instead of using a standard 40-hour workweek for the purpose of calculating overtime, the company was spreading the calculation across 14 consecutive days. Workers were paid time-and-a-half for any hours over eight worked in any individual day, and for working more than 80 hours during the 14-day period.

A week is still seven days long

Problem is, the FLSA requires employers to use a standard 40-hour work week when calculating overtime.

I know what happens, particularly in industries such as health care. Employees sometimes work odd schedules that result in a different number of hours worked in different weeks — some weeks are “short” while other weeks are over 40 hours.

It can be tempting to try to average the work hours over two weeks in order to “even out” the work time. The trouble with that approach is that it almost always results in the employees getting paid less overtime.

Well, that and the fact that averaging hours worked across a period of more than a week is illegal. D’oh!

The law says the employer can’t institute policies that always favor the employer at the expense of the employees — for instance, if you’re going to use rounding when recording clock-in and clock-out times, you have to round in the employees’ favor as well as in your own. You can’t only round up or down when it benefits you.

Misunderstandings

So, apparently, the company had an “understanding” with their employees about this overtime calculation. But the law is the law, and one of the things the law says is employees cannot agree-away their rights under the FLSA. Doesn’t matter how accommodating your employees are, or what sort of “understanding” you reach, you still have to abide by the provisions of wage and hour law.

Now, the argument can be made that wage and hour law is behind the times in some respects. That current law was designed when most people worked in factories and offices on a standard shift and were able to leave their jobs behind when they left work. That provisions need to be altered to allow for more workplace flexibility in this age of telecommuting and BlackBerrys and flexible work arrangements.

And that may well be true.

But for the time being, the law is what it is, and we’ve got to work within its boundaries or face the consequences. So let’s be careful out there, OK?

Filed under: Wage and hour lawsuits