What is 'Chinese Overtime' (AKA the Fluctuating Workweek)?
“Chinese overtime,” also known as the fluctuating workweek, day rate, or piece-rate pay formula, refers to an arrangement in which an employee receives half of their regular wage, instead of time-and-a-half, for any hours worked over 40 in a single workweek.
Although this method of payment can be legally utilized for employees who earn a fixed salary for fluctuating workweeks, there are many ways in which unscrupulous employers can take advantage of this payment method to illegally deny employees their rightful time-and-a-half overtime wages earned.
Have you received half-time for your overtime pay? If so, your employer may have violated federal law.
Under the Fair Labor Standards Act, your employer cannot fire or retaliate against you for taking legal action or filing a formal complaint. Find out if you can recover money for your unpaid overtime wages by completing our free, no-risk case evaluation form today.
Requirements for Legal ‘Chinese Overtime’
To legally pay “Chinese overtime” to an employee, the following requirements must be met:
- The employee’s hours must vary from week to week.
- The employee’s regular rate of pay used to calculate their half-overtime rate must not fall under federal minimum wage requirements.
- The employer and employee must clearly understand that the fixed salary will cover all hours worked in a workweek, even if only a small amount of time is worked.
Common Labor Law Violations
As outlined above, employers are only permitted to pay “Chinese overtime” to employees who are paid using the fluctuating workweek method. When an employer makes mistakes using the fluctuating workweek pay method, they can run into trouble with federal overtime law.
Common mistakes when paying “Chinese overtime” include:
- The employee worked less than 40 hours a week and received less than their fixed salary.
- The employee received bonuses, holiday pay, commission, shift pay or an additional form of compensation and therefore is not earning a “fixed salary.”
- The employee is not informed about the company’s use of the fluctuating workweek.
- The employee worked so many hours in a single week that their regular fixed rate of pay falls beneath the federal minimum wage.
- The employee’s work schedule does not fluctuate significantly from week to week.
Call Our Wage and Hour Attorneys
If you suspect you are a victim of wage theft, you may be able to file a claim against your employer to recover your unpaid overtime wages. There is a time limit for filing overtime claims, so do not hesitate to contact us today by filling out our free, no-risk case evaluation form.