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March 09, 2010
Employer's Change to 12-Hour Shifts Results in OT Violations, Labor Dept. Says

A petroleum refinery located in Ohio has paid $969,182 in back wages to 173 workers after the Department of Labor accused the company of violating the Fair Labor Standards Act's overtime rules after switching the employees to a 12-hour shift.

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The department alleged that the violations began when the Husky Energy Corp. changed from 8-hour shifts to 12-hour shifts for some of its workers, which resulted in alternating workweeks of 60 and 24 hours. The department alleges that instead of paying time and one-half an employee's regular rate for the resulting overtime hours, the company established an "adjusted" rate whereby all these hours were compensated at the same rate.

The department also accused the company of failing to include a shift differential in overtime pay calculations. An employer is not required by law to provide a shift differential, but if one is paid, then it must be included as part of the employee's regular rate of pay for purposes of computing overtime.

The company agreed to pay the $969,182 in back wages to its employees and to establish bona fide rates upon which time and one-half for overtime hours would be calculated in the future. The company also agreed to include the shift differentials in the regular rate for purposes of calculating overtime in the future.

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