Stop OvertimeFun fact – the Fair Labor Standards Act (FLSA) does not allow the “banking” of overtime hours (or “comp time”) from one workweek to the next.  This is when an employee works overtime hours one week and then instead of getting paid the overtime that week, takes extra time off the following week.  Employees love it.  Employers love it.  The DOL and MnDOLI do not.

The FLSA states that a non-exempt employee (hourly or salaried plus overtime) who works more than 40 hours in a workweek is entitled to overtime for all hours worked. Similarly, the Minnesota Fair Labor Standards Act (MnFLSA) does not allow banking overtime hours after 48 hours in a workweek (if you are not subject to the FLSA, Minnesota’s overtime requirement applies over 48 hours versus the 40 hours under the FLSA).

Can An Employee Agree to Comp Time or “Banking” Hours?

What if the employee asks or agrees to bank hours worked this week to take more time off next week with the same pay?  Is that okay?  Nope.  An employee cannot contract for lesser rights than he or she is allowed under the FLSA or MnFLSA – even if the employee wants (and usually begs) for it.

Are there any exceptions?  Of course!  The FLSA allows public employees (under a collective bargaining agreement, MOU or other agreement) compensatory time in lieu of overtime compensation, at a rate not less than one and one-half hours for each hour of employment for which overtime compensation would be required.  29 U.S.C. 207(o).  For private employers – no can do.

Can An Employer Change the “Workweek” To Spread Out Overtime Hours?

There are certainly ways an employer may handle overtime, however, such as in their definition of the “workweek”.  Surprising to some (it’s like a two-for-one Friday Fun Fact!) – the FLSA does not define “workweek”.  The DOL regulations set forth how to determine the workweek (29 CFR 778.105), which is a “recurring period” of seven consecutive 24-hour periods. Though it is often Sunday- Saturday, that does not need to be the case.

A workweek can start at any time, on any day.  If, for example, an employee always works a disproportionate amount of hours say between Thursday and Sunday, the employee’e workweek could be determined to be Saturday – Friday.  Thus, splitting up the four most heavily worked days. However, keep in mind that an employer can’t simply move around the “workweek” each week or so to suit the overtime needs.  The “workweek” established is supposed to be permanent – if it changes, it is supposed to be a permanent change.  The DOL’s regulations specifically address how to calculate overtime when a workweek changes (29 CFR 778.301302).

Don’t Forget About Recordkeeping!

It is so tempting to say yes when a hard-working employee wants to just get that project done this week and take an extra day off next week to go up North.  Yet, you are a savvy HR professional and know that the employer is ultimately responsible for keeping an accurate record of all hours worked by the employee.  Even if the employee “agrees” to “just record” the hours in the following week – you know that’s no defense to a wage and hour lawsuit.  As I wrote about in an earlier post, the FLSA’s recordkeeping requirements are the duty of the employer – not the employee (though employers ask employees to assist in this regard, it doesn’t change the employer’s duty).

To summarize, I can tell you this.  Time and time again, I see the employer that bends over backwards for an employee as the one that gets sued – often for doing exactly as the employee has asked.  And I know they can make a very convincing argument.  As much as you want to allow the employee to bank hours as a “benefit”, just say no!