You Can't Avoid Paying Overtime Wages By Splitting Up An Employee's Tasks
Unless an employee fits into an exemption under the FLSA, employees who are entitled to overtime need to be paid overtime pay for all hours over 40 worked in a single work week. One Maryland school bus company thought otherwise.
They thought that by recording hours for different tasks separately, they could avoid paying overtime wages. For example, if a driver drove 30 hours and trained other drivers for 20, each task was recorded and paid separately. The employee would be paid in essence for two workweeks—a 30-hour week and a 20-hour week—not a single, 50-hour week which would require the employee receive 40 hours of regular pay and 10 hours of overtime pay. This is a common practice. Often companies do this by splitting the employees work between two commonly owned companies.
Smart? Credible? A workable loophole? Hardly.
The bus company, First Student Inc., paid $1.5 million to settle the class-action lawsuit brought by employees claiming that they were improperly denied overtime pay. While a bus-company spokeswoman “declined to comment” about the settlement, $1.5 million is itself a rather loud—and clear—comment.
It’s hard to see how the company thought this would be acceptable. There does not appear to be ANY support in the law for the proposition that simply by recording different tasks or jobs separately, a company can avoid paying overtime wages. Non-exempt employees “may not be employed for more than 40 hours in a week” without receiving overtime pay. Period. Unfortunately, this bus company is likely not alone in its practices. But keep in mind that just because a practice is “usual” in an industry doesn’t make it legal.
