labor lawAdivision of labor law center

The U.S. Department of Labor or DOL announced on January 15, 2009 that Sandia Corp. has agreed to pay more than $2 million in back wages for unpaid overtime.

 

In an interesting wrinkle, the Albuquerque employer apparently tried to avoid overtime payments for non-exempt employees by setting no fixed payroll week.

 

Under the federal FLSA or Fair Labor Standards Act, employers must pay an employee overtime when the employee works more than 40 hours in the payroll week.

 

Information on the FLSA requirements for overtime are included on the federal minimum wage poster that every employer must prominently display in the workplace.

 

By not having a fixed payroll week, Sandia averaged the employees’ hours over two or more weeks. Under the FLSA, an employer can establish any fixed payroll week that the employer likes. The payroll week can run from Sunday to Saturday, or from Monday to Sunday, or from Thursday to Wednesday. Under some circumstances, an employer can change the payroll week, as long as employees are given advance notice.

 

However, the employee’s workweek must be a fixed and regularly recurring period of 168 hours, or seven consecutive 24-hour periods. It may begin on any hour of any day, but must run for 168 consecutive hours. An employer could begin the payroll period at 11 pm on Wednesday and have it end at 10:59 pm the following Wednesday. (In fact, many companies that employ shift workers coincide the beginning of a payroll period with the beginning of a shift – not at midnight.)  

 

Under federal law, different workweeks can be established for different employees, or groups of employees. However, the employer cannot fail to establish a workweek, or constantly shift the workweek, in an attempt to avoid overtime.

 

A U.S. Department of Labor investigation uncovered illegal activity at Sandia. Based on the investigation, Sandia Corp., doing business as Sandia National Laboratory has agreed to pay $2,077,248 in overtime back wages to 2,657 research employees. Sandia cooperated with the investigation.

 

“Among the department’s highest priorities is ensuring that workers are paid all the wages they are owed,” said Secretary of Labor Elaine L. Chao. “In this case, we have succeeded in securing more than $2 million in back wages for these workers.”

 

According to the U.S. Department of Labor, an investigation by the Wage and Hour Division district office in Albuquerque covering the period from May 23, 2006, to Oct. 31, 2008, found that Sandia Corp. failed to establish a fixed workweek, resulting in employees not receiving complete wages for overtime hours worked.

 

Under the FLSA, employees must be paid at least the federal minimum wage of $6.55 per hour for every hour worked.  When an employee works more than 40 hours per week, he or she must be 1.5 times their regular rate for the overtime.

 

The FLSA also requires that employers maintain accurate payroll records.

 

On July 24, 2009 the federal minimum wage will increase to $7.25 per hour.

 

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