In Douglas v. Xerox Bus. Servs., LLC, 2017 U.S. App. LEXIS 22967 (9th Cir. Nov. 15, 2017),the Ninth Circuit Court of Appeal considered whether compliance with the Fair Labor Standards Act’s (“FLSA”) minimum-wage provision should be determined based on the workweek as a whole or each individual hour within the workweek. Under the compensation plan at issue, employees were paid flat and variable rates for certain defined tasks, while other tasks had no specific designated rate. At the end of the workweek, the employer added the amounts earned for the defined tasks and divided the total by the number of hours worked that week. If the resulting hourly wage fell below minimum wage, the employer provided subsidy pay to ensure that, in the context of the workweek as a whole, the employee received the appropriate minimum wage. The employees argued that this payment plan did not comply with the FLSA because there were individual hours within the workweek for which they did not receive the minimum wage. The Court rejected this argument, finding that the relevant unit for determining compliance with the FLSA is the workweek as a whole and, therefore, the employer’s practice was permissible.
If you have any questions about FLSA compliance, please contact Brianna L. Frazier, Esq., or any of the attorneys at Shulman Bastian Friedman & Bui LLP at 949-340-3400.