State law is stricter than federal law when it comes to overtime calculations

If you work for an employer that has operations in multiple states, it’s wise to pay extra attention to your overtime calculations.

Why is that? Because Pennsylvania law differs from federal law in terms of overtime calculations. If you work for big company, such as a retailer, that has a base of operations outside of Pennsylvania, it’s possible that they’re not paying for all of the overtime that’s due to you.

Unfortunately, this is a common scenario.

Right now, workers at F.Y.E. stores are suing the company for exactly this reason. Last year, 569 managers at Pennsylvania Radio Shack stores received a settlement over $5 million after that company was accused of shorting managers overtime pay.

Let’s talk about what the fluctuating workweek is, and how it may affect workers in Pennsylvania.

Calculation Shortchanges Workers

Under the federal Fair Labor Standards Act (FLSA), it’s legal to compensate for overtime using something called the fluctuating workweek model. Many companies like this model because it saves them money, even though that savings comes at a cost to employees.

However, Pennsylvania courts have repeatedly found that the fluctuating workweek model violates the Pennsylvania Minimum Wage Act (PMWA).

So how does this model work?

In regular overtime calculations, employers pay time-and-a-half to eligible employees for any hours worked over 40 in a given week. It’s easy enough to understand.

But the fluctuating workweek model is a lot more complicated. It’s often used to compute overtime for salaried employees who are eligible for overtime and who work a different number of hours each week. The fluctuating workweek model allows the employer to take the managers’ weekly salary and divide it by the total number of hours he or she worked that week. That would produce an hourly rate for the week, which would be used as the basis for overtime.

The calculations can be somewhat confusing, but the upshot is that the more hours the person works, the less he or she will make per hour, for both regular work time and overtime.

Unlawful in Pennsylvania

Courts in Pennsylvania have consistently found that the fluctuating workweek is not a permissible way of calculating overtime under state law. However, that doesn’t mean that unscrupulous or unknowing employers won’t attempt to use it when calculating overtime or back pay awards.

The problem is that many employees are not aware of the nuances of federal and state wage and hour law, so they may be likely to accept their overtime compensation or back pay awards and not question the totals.

Just remember that the PMWA states that employees who are eligible for overtime are entitled to 1.5 times their regular hourly base rate of pay for any hours worked over 40 in a given workweek. If you question your overtime totals and are given a confusing explanation for how the total was computed, it’s possible that you’re not being paid in accordance with state law.

Contact Us Now for a Free Consultation

If you feel that you’ve been unfairly cheated out of overtime pay, it’s a good idea to speak to an attorney.

Email us at murphy@phillyemploymentlawyer.com, or call (267) 273-1054 for a free consultation.