FLSA2008-5 — Quadrennial adjustment to single pay period length

U.S. Department of Labor
Employment Standards Administration
Wage and Hour Division
Washington, D.C. 20210

FLSA2008-5

May 30, 2008

Dear Name*:

This is in response to your request for an opinion regarding whether the pay schedule of
your client, a school district (district), complies with the minimum wage and overtime
provisions of the Fair Labor Standards Act (FLSA).
1
It is our opinion that the pay
schedule complies with the minimum wage and overtime provisions of the FLSA.

The district computes non-exempt employee salaries by multiplying the hourly rate by 40
and then multiplying the result by 52. For example, an employee paid $13 per hour
receives an annual salary of $27,040 ($13 per hour x 40 hours per week x 52 weeks per
year). The employee receives a bi-weekly salary of $1,040 ($27,040 divided by 26 pay
periods). The district uses a 26-pay-period cycle based on a negotiated agreement
regarding exempt teachers. For administrative convenience, the district pays all
employees, including non-exempt employees, based on that cycle. The district pays time
and one half of the hourly rate for hours worked over 40 per workweek.

The district adjusts its pay date by one week an average of every four years to ensure
only 26 pay periods each fiscal year. This adjustment results in one pay period
containing three workweeks, instead of the typical two. In a discussion with my staff,
you stated that the adjustment is noted on payroll records and paystubs at the start of each
fiscal year in which there is a change. You state that employees expressed concern that
they are paid “less” during this particular pay period. The district maintains that this
practice does not violate the FLSA because employees still receive pay in excess of the
minimum wage, their contractual hourly wages for all hours worked, and overtime pay.
You ask whether this pay schedule complies with the FLSA.

The FLSA uses “a single workweek as its standard and does not permit averaging of
hours over 2 or more weeks.”
29 C.F.R. § 778.104. Therefore, “[w]here the salary
covers a period longer than a workweek, . . . it must be reduced to its workweek
equivalent.”
29 C.F.R. § 778.113(b). For example, the bi-weekly salary of $1,040 results
in $520 of weekly pay. During the pay period containing three workweeks, the weekly
pay amounts to $346.67 per week ($1,040 divided by three workweeks). The regular rate
during the three workweek pay period is $8.67 per hour ($346.67 divided by 40 hours).
During workweeks with no overtime, additional compensation is not due if the regular

1
Unless otherwise noted, any statutes, regulations, opinion letters, or other interpretive material cited in
this letter can be found at www.wagehour.dol.gov.

rate for the workweek yields at least the federal minimum wage under section 6(a) of the
FLSA.
2
See U.S. v. Klinghoffer Bros. Realty Corp., 285 F.2d 487 (2nd Cir. 1960).
Therefore, the pay schedule during nonovertime workweeks complies with the FLSA
because the corresponding regular rate of $8.67 per hour exceeds the federal minimum
wage. The pay schedule also complies with the FLSA overtime provisions because
employees receive at least time and one half of their regular rate for hours worked over
40 in a workweek.

This opinion is based exclusively on the facts and circumstances described in your
request and is given based on your representation, express or implied, that you have
provided a full and fair description of all the facts and circumstances that would be
pertinent to our consideration of the question presented. Existence of any other factual or
historical background not contained in your letter might require a conclusion different
from the one expressed herein. You have represented that this opinion is not sought by a
party to pending private litigation concerning the issues addressed herein. You have also
represented that this opinion is not sought in connection with an investigation or litigation
between a client or firm and the Wage and Hour Division or the Department of Labor.

We trust that this letter is responsive to your inquiry.

Sincerely,

Alexander J. Passantino
Acting Administrator

* Note: The actual name(s) was removed to preserve privacy in accordance with 5
U.S.C. § 552(b)(7).

2
Effective July 24, 2007, the Federal minimum wage increased from $5.15 per hour to $5.85 per hour. It
will then increase to $6.55 per hour on July 24, 2008 and to $7.25 per hour on July 24, 2009.