If you work 50 hours a week, but your employer only paid you for 40 hours, the first word that comes to mind is "unfair." As employment lawyers, the first words that come to our minds are: "wage and hour violation." Many companies pay their employees using the fluctuating work week without letting the employees know this system cuts into their wages.
What is fluctuating work week pay? What is Chinese overtime?
We get lots of questions about a pay method referred to as "Chinese overtime." This is better known as fluctuating work week pay, or half-time pay. This is a completely legal way to pay employees, but employers constantly make mistakes when applying this pay practice. Unless they follow the letter of the law, the employee is entitled to substantial back wages and penalties. As overtime attoneys, we found that most employers do not implement this system correctly.
How it works: the more you work, the less you make per hour.
This pay method allows an employer to pay an employee a fixed salary as straight time pay for all hours worked in the workweek, whether they total 35, 40, 45 or more. However, if you work more than 40 hours in a week, the flat salary must be divided by the total number of hours worked to get your effective hourly rate. The employer must then pay you an additional amount at the "half-time" rate for all hours worked over 40 in a week.
The fluctuating work week: an example of a decreasing pay scale.
As an example, if your employer pays you a flat salary of $400 per week and you work 40 hours, then you make $10 per hour ($400/10). If you worked 35 hours and you receive your $400, then you make $11.42 per hour ($400/35). If you work 45 hours and you receive your $400 salary, you earn $8.88 per hour.
Note two important points: First, the more you work, the less you make per hour. Second, when you work more than 40 hours per week, your employer has to pay you not just the $400 salary, but overtime pay as well. The overtime pay here would be $22 (5 overtime hours times your half rate of $4.44).
Perfectly legal, but a perfect storm for mistakes.
Employers constantly make mistakes when applying this pay practice, leading to hard-working people like you getting the short end of the stick. The benefit of calling our employment lawyers to review your case is that by investigating your pay stubs we can identify clear violations including:
- Violation: We find weeks you worked less than 40 hours without your base salary.
- Violation: We find weeks where you worked so many hours that your rate falls below minimum wage.
- Violation: We find that your work schedule does not fluctuate weekly. An hour variance here and there is not enough.
- Violation: We find that you receive a bonus or other compensation that is not included in calculating your overtime rate.
What kind of companies violate the fluctuating work week?
All types of companies violate the law, whether it's a small shop in the mall or a corporation with thousands of employees. Wage and hour lawsuits have been brought against giant companies for wage and hour law violations, including
- Fed Ex
- Wells Fargo
- State Farm
As we've stated before, it is legal for an employer to pay you using the fluctuating work week method, but the problem becomes the laundry list of violations we commonly see on pay stubs.
One phone call can put that money back in your wallet.
After one call to our office at 888-449-2068 you will be able to find out if you're owed money with a free case review. Join the hundreds of workers we have helped to recover wages for. You can also send us a confidential contact form to tell us what is happening with your employer's pay practices. If you want to learn more about wage and overtime claims order our free book, The 10 Biggest Mistakes that can Hurt Your Wage and Overtime Claim.