Determining Federal Minimum Wage Compliance -- Do You Consider Every Hour Worked Separately Or The Workweek As A Whole?

An issue that sometimes arises in minimum wage cases under federal law concerns how courts should determine whether an employer has paid the applicable hourly minimum wage. Are courts supposed to consider each hour separately? Or do they consider the workweek as a whole, divide the total weekly compensation by the number of hours worked, and determine whether that per-hour average meets the applicable hourly minimum wage? For example, if an employee is sometimes paid $9.50 per hour and at other times receives $5 per hour for a forty-hour workweek, has the employer violated minimum wage law by paying $5 for some hours worked, or has it complied with minimum wage law because the employee's pay averages to $7.25 per hour for the week?

The federal minimum wage statute, 29 U.S.C. § 206(a)(1)(C), doesn't offer much guidance for this issue. The federal minimum wage law simply states that "[e]very employer shall pay to each of his employees who in any workweek is engaged in commerce . . . not less than . . . $7.25 an hour." Although the statute sets the minimum wage that employees must be paid each hour, it does not definitively prescribe the computation period or say that the only permissible measure is the hour. Rather, the statute is open to an interpretation allowing for averaging over a longer period of time, like a day or a week when reviewing whether an employee has received the applicable hourly minimum wage.

The United States Department of Labor, the agency tasked with implementing and enforcing federal minimum wage law, said in 1940 that it would apply the workweek method, rather than an individual per-hour analysis, in enforcing hourly minimum wage payments. The DOL's Field Operations Handbook specifically states that "an employee subject to [federal minimum wage law] is considered to be paid in compliance if the overall earnings for the [workweek] equal or exceed the amount due at the applicable [minimum wage]." Moreover, the Department of Labor's website provides that "[t]he workweek is the basis on which determinations of. . . compliance with the wage payment requirements of the FLSA are made."

Federal courts have consistently followed the Department of Labor's 1940 policy statement. Most federal courts that consider this question have ruled that the Department of Labor's "workweek" standard is the correct analysis. The federal courts usually decide that the minimum wage law's purpose is accomplished as long as the total weekly wage paid by an employer meets the minimum weekly requirements of the minimum wage statute.

An important component of the courts' analysis is that Congress has never changed the minimum wage law to state that the workweek method is an improper calculation even though Congress has amended the minimum wage statute since that law's 1938 passage. That Congress has changed the minimum wage law without rejecting the workweek method is significant because, when that happens, courts assume that Congress's failure to overrule the prevailing judicial decisions means that the courts have interpreted the law in the manner intended by Congress. The theory is that, if Congress though the courts were reaching the wrong legal conclusions, Congress would say so by changing the law at issue. When Congress doesn't do so, the courts assume that they're getting the analysis right.

Harley Erbe