The term “Chinese overtime,” though antiquated and misleading, refers to a method of calculating overtime pay for employees working under a fluctuating workweek arrangement. It is also applied in situations where workers are paid a piece rate or a day rate. The concept ensures that employees earning a fixed salary are compensated for additional hours worked beyond their regular schedule.
Under this method, employees with a fixed weekly salary receive additional compensation for hours worked over forty in a workweek, but the overtime pay rate is calculated as half their regular hourly rate instead of the standard time-and-a-half. This calculation is based on the idea that the fixed salary already compensates for all regular and overtime hours worked during the week.
The Fair Labor Standards Act (FLSA) mandates that employees covered by its provisions must be paid overtime for any hours worked over forty in a week. However, the law allows for the fluctuating workweek method as long as the employee’s overtime pay is not less than half of their regular hourly rate and certain conditions are met, including mutual agreement between the employer and employee about the arrangement.
If you believe your employer is not properly compensating you for overtime or if you have concerns about your pay arrangement under a fluctuating workweek, it’s crucial to seek legal guidance. At 770GoodLaw, our employment attorneys can help clarify your rights and ensure you receive the wages you deserve. Contact us for a free consultation to explore your options.
