Altered Work-Week Rules May Benefit Manager

Question: I was hired as a salaried store manager with a 40-hour, five-day week. The company recently started a new management policy based on a 45-hour work week with 40 hours straight time and five hours overtime — less per hour. They say we will be scheduled 45 hours a week so our income will be the same. Any overtime over the 45 hours a week will need pre- approval. This really upsets me. Any way I look at it, I’ll be making less per hour and it’s a pay cut.

Also, when I was on a flat salary, I hardly ever worked overtime. And there are other factors. We don’t have a computer at work and I need to check company e-mails and messages online at home. Isn’t this now part of my hourly work time? What about other out-of-store time, such as picking up merchandise from other stores, going to the post office to mail company mail, etc.? I also have to test our products at home. Can I charge my time for that as well?
—R.S.
Torrance

Answer: It’s always a shock to have your work schedule changed, especially since we have to plan the rest of our lives around our work. (Wouldn’t it be nice to plan work around our lives, instead??)

However, according to Compensation Resources, Inc, executive compensation and human resource consultants, “Employers have the right to alter the number of hours worked in a week, and change the exemption status of employees (eligibility for overtime), as long as they are following Fair Labor Standards Act (FLSA) and applicable state regulations.”

And although it appears that you are getting a pay cut, given that you now have to work more hours for the same pay, you’ll see that this is actually an opportunity to make more money. Compensation Resources explains:

“Although you are taking a pay cut in terms of your hourly rate, you actually have the potential to earn more per week, if you work more than the assigned 45 hours. For example, suppose a salaried employee earns $20,800 per year. This equates to $400 per week, or $10 per hour. The employee is then switched to an hourly rate equal to the $400, with a 40-hour workweek. The new hourly rate will be $8.42. For any hours worked above 40 hours, the employee will be entitled to receive time and a half, or $12.63 per hour. Therefore, assuming the employee worked 45 hours, the employee would earn $8.42 for 40 hours, equal to $336.80, plus $12.63 for five hours, equal to $63.15. This totals $399.95 for the week.”

Although you say you seldom worked more than 40 hours, it sounds like you actually were putting in extra unpaid hours. Now you can be compensated for this time.

“The courts have held that an employee is covered under the FLSA for all time spent performing job-related activities, whether they are at the job site or somewhere else,” Compensation Resources tell me.

Indeed, FLSA states: “Hours worked include all the time during which an employee is required or allowed to perform work for an employer, regardless of where the work is done, whether on the employer’s premises, at a designated work place, at home or at some other location.”

The Department of Labor explains: “The FLSA defines the term ‘employ’ to include the words ‘suffer or permit to work.’ Suffer or permit to work means that if an employer requires or allows employees to work, the time spent is generally hours worked.

“Thus, time spent doing work not requested by the employer, but still allowed, is generally hours worked, since the employer knows or has reason to believe that the employees are continuing to work and the employer is benefiting from the work being done. This time is commonly referred to as ‘working off the clock.’

Compensation Resources suggests you talk to your employer in detail about the new pay policies. You should tell your employer of these extra out-of-office hours. Although your employer is entitled to pay you for this time, they may not be aware of it and may not want you to continue. But if these activities are considered part of your job, they need to allow for them.

Here’s more explanation from the Department of Labor: “It is the duty of management to exercise control and see that work is not performed if the employer does not want it to be performed. An employer cannot sit back and accept the benefits of an employee’s work without considering the time spent to be hours worked. Merely making a rule against such work is not enough. The employer has the power to enforce the rule and must make every effort to do so. Employees generally may not volunteer to perform work without the employer having to count the time as hours worked.”

Hopefully, with some honest communication, you and your employer can agree on a working schedule that suits both your needs, and makes you a little extra money at the same time. Good luck.