Mixed Rates Of Pay & The Fair Labor Standards Act

Mixed Rates Of Pay & The Fair Labor Standards Act

Often times employees receive different pay depending on the job they are doing. This creates a legally complex situation when it comes to paying overtime to these employees and doing so in compliance with the Fair Labor Standards Act (FLSA). If the employee worked at two different pay rates, then which pay rate is the overtime calculated based upon? The answer is not simple, in some cases a blended rate may be appropriate, however, courts, including a recent decision by the Fourth Circuit, have been skeptical of blended overtime rates. Blended overtime rates are acceptable, in some situations, but those are very specific circumstances where there is a specific number of overtime hours worked that does not vary.

There are many ways to calculate the overtime of a worker who makes different amounts for different tasks, and a lot depends on how separate and distinct these tasks are, which is a fine line drawn by the court in each case. Paying overtime at the maximum rate can cost employers, but paying overtime at an average, blended, or agreed upon rate, can lead to an expensive lawsuit.

There is no question special rules apply, and have been interpreted through hundreds of cases, as to how to pay workers who have different rates of pay for different jobs under the Fair Labor Standards Act (FLSA). These rules are complex and difficult to follow. I find most non-FLSA lawyers get these rules wrong, and I once defended a restaurant because it got the rules wrong, paid the employee too much, and the lawyer for the employee got the law wrong and sued for an overpaid employee. Figuring out how to pay your mixed rate employees correctly is a complex Fair Labor Standards Act (FLSA) exercise, and if you get it wrong a Federal Lawsuit is very costly to defend. Call Joshua Sheskin at the Broward County Florida Headquarters of Lubell Rosen for help in determining how to pay your employees, or if an employee is already filing suit claiming you got their pay wrong. – Joshua H. Sheskin, Esq., 954-880-9500 [email protected]

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