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At A Glance
This Alert Affects:
Workers in Pennsylvania who are paid on a fluctuating workweek basis and were paid half-time or "Chinese overtime" for hours worked over 40.
Employees who were not paid in compliance with Pennsylvania state laws may be able to pursue compensation for back wages.
All companies in Pennsylvania
A person is said to be on a "fluctuating workweek basis" when they are paid a fixed, weekly salary, regardless of the number of hours worked.
In August 2012, a Pennsylvania federal judge found that payment of half-time, or Chinese overtime, does not comply with a state minimum wage law.
Employees in Pennsylvania who were paid only half-time after working more than 40 hours a week may be able to make a claim for back wages.
Under federal labor laws, employees who are paid on a fluctuating workweek basis, meaning they are paid a fixed amount regardless of how many hours they work, are to be compensated for all overtime hours at a rate of one-half times their regular rate of pay; however, a Pennsylvania federal judge recently found that this method, often referred to as "Chinese overtime," violates a state minimum wage law, paving the way for a new wave of litigation against employers in Pennsylvania.
If you work in Pennsylvania and are paid on a fluctuating workweek basis, you may be able to file a claim for compensation if you were not properly compensated for your overtime hours.
Is Chinese Overtime Pay Illegal in Pennsylvania?
The ground-breaking ruling by Pennsylvania federal judge Cathy Bissoon goes against employers using fluctuating workweeks to cut overtime costs and helps claims on behalf of employees subject to these practices. In a case against Kraft Foods Global Inc., Judge Bissoon found that the company's method for calculating overtime pay does not comply with state law. Specifically, she found that the company's payment of overtime under the fluctuating workweek method at one-half times the workers' regular pay rates violated the Pennsylvania Minimum Wage Act which expressly requires overtime pay at a rate of time-and-a-half.
Fluctuating Workweek PA: What is Your Employer's Method of Compensation?
If you are being paid Chinese overtime in Pennsylvania and are compensated on a fixed weekly salary regardless of the number of hours worked, you may be able to file an unpaid overtime claim in light of this recent ruling. While federal labor law allows this method of compensation for fluctuating workweek employees, two recent cases in Pennsylvania have favored employees and traditional overtime compensation method, which is paid at time-and-a-half.