It’s a common misconception that day rate employees are not entitled to overtime under federal law.
Employers generally assume that paying a day rate or piece work compensation is a scenario in which the more they can get out of a worker during that period is to their benefit.
Just because you are not getting paid by the hour or by salary does not exempt a worker from being entitled overtime pay for hours worked in excess of the thresshold.
A roofer for example may be getting paid a piece rate, meaning they get paid based on how many shingles are installed on a roof in a particular day. Another example would be a landscaper being paid based on yards of sod installed.
These are known as production jobs, or production pay.
With normal hourly rate work, it’s easy to determine when the threshold for time-and-a-half OT is exceeded and how to calculate the amount of compensation per hour is required for overtime hours worked. (Regular rate x 1.5 = overtime rate)
It gets a little more complicated calculating overtime for day rate production work.
Whats used is known as the fluctuating workweek method to calculate overtime.
It works like this:
The average hourly rate produced is calculated by dividing the fixed salary and any non-excludable additional pay by the number of hours actually worked in the workweek. Thus the average hourly rate will change from week to week based on total hours worked. The worker is then entitled to an additional half time for each hour worked in excess of the 40 hour workweek threshold.
It’s a mouthful I know, but that’s the essence of the fluctuating workweek method used to calculate overtime for day rate employees.
The FLSA requires all hours worked over 40 in a workweek to be paid a one and one-half rate by non-exempt employers.
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Non-exempt production workers are entitled the same wage and hour benefits provided by the FLSA as every other covered employee.
It may be an honest misunderstanding, but in many cases these employers are knowingly misleading their workers in an attempt to avoid paying overtime wages.
The fluctuating workweek increases the level of confusion, and that allows unscrupulous employers wiggle room to try to avoid paying what they day rate workers are owed.
People working a production rate need to be especially aware of their rights, to ensure they aren’t being cheated out of what their owed by law.
If you believe you are owed overtime pay, contact the experienced Florida Overtime Lawyers at Celler Legal, P.A. who can help you determine what you may be owed, and your options to collect what you are entitled.