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June 21, 2011
Employers Must Calculate Compensation Based on Actual Period of Work

Many companies consider Mondays as the start of their workweek. Many If your company takes this approach—and also schedules a few staff memebers to work seven consecutive days—you should make sure your company is meeting your obligations to pay “seventh-day” overtime wages. One employer learned the hard way that splitting the actual days worked across two designated workweeks won’t eliminate the requirement to pay overtime for the seventh day.

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Crew Members Sue for Overtime

“Rollins” and “Howard” worked consecutive 14-day “hitches” on Ventura-based Metson Marine’s ships. Each 14-day period started on a Tuesday at noon and ended at noon on the Tuesday two weeks later. They were paid to work a 12-hour daily shift except on crew-change days, when they worked only six hours.

Metson calculated overtime pay on the premise that the workweek began at 12 a.m. on Monday and ended at 11:59 p.m. the following Sunday. Under this framework, the crew members worked six days in the first workweek, seven days in the second workweek, and two days in a third workweek. As a result, they were paid a single seventh-day overtime premium, at the end of the second workweek.

Rollins and Howard sued Metson to recover unpaid overtime wages, and the trial court dismissed the case before trial, concluding that Metson calculated the wages correctly. Rollins and Howard appealed, claiming that they were entitled to an additional day of overtime pay per hitch for working seven consecutive days in a workweek.

The Seventh-Day Rule

California Labor Code Section 510(a) directs that the first eight hours worked on the seventh day in any one workweek must be paid at least 1.5 times the regular hourly rate. Any work in excess of eight hours on the seventh day must be paid at least twice the regular hourly rate. Section 500(b) defines a workweek as any seven consecutive days, starting with the same calendar day each week. It specifies that a workweek is “a fixed and regularly occurring period of 168 hours, seven consecutive 24-hour periods.”

Employer Is Bound by Actual Workweek

The crew members argued that Metson shouldn’t be able to get around the requirements of Section 510(a) by designating an artificial workweek that doesn’t correspond with the period actually worked. They asserted that their workweek began and ended on Tuesday, so Metson was required to pay overtime wages for work performed on the seventh and 14th day of each hitch.

The Court of Appeals agreed with the employees. It found that Section 510(a)’s clear intent is to provide overtime pay for employees who are required to work a seventh consecutive day in a fixed and regularly occurring workweek—and “Metson’s attempt to circumvent this requirement cannot be condoned.” The court reversed the trial court ruling and held that Metson’s employees were due overtime compensation for one additional day of every 14-day hitch they worked and didn’t receive this pay.

The lesson for employers? You can designate any workweek that you like and require your employees to observe it, but you must also use that workweek for purposes of calculating employee compensation. Now might be a good time to review your schedules and make sure you’re not improperly splitting consecutive workdays over two pay periods for overtime purposes. Seymore v. Metson Marine, Inc., Calif. Court of Appeals (Dist. 1) No. A127489A, (2011).

Practice Tip: An employee’s workweek may be changed only if the change is intended to be permanent and is not designed to evade overtime obligations.

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