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COVID-19 and the Fair Labor Standards Act: How the Pandemic Affects Overtime Pay

On Behalf of | Jun 30, 2021 | COVID-19

Already faced with the economic impact of the COVID-19 pandemic, employers must also face a host of confusing legal issues related to the pandemic and its effects on the relationship between employees and employers. These legal issues range from expanded medical leave requirements to whether employers can mandate that employees be vaccinated before returning to work.[i] However, in considering the legal ramifications of the COVID-19 pandemic, employers often overlook a key employment law statute: The Fair Labor Standards Act (“FLSA”).

The most well-known FLSA provision requires employers to pay employees overtime compensation for every hour worked above forty (40) in a single workweek at a rate no less than one and one-half times the employee’s regular rate of pay.[ii] To determine the appropriate amount of overtime compensation to pay an employee, an employer must determine both the employee’s number of hours worked in a workweek and the employee’s regular rate of pay for that week. Both of these calculations are affected by new issues created by COVID-19.

First, the FLSA regulations state that time spent by an employee receiving medical attention or treatment at the direction of the employer is considered time spent working for purposes of calculating hours worked in a workweek.[iii]  Therefore, if an employer requires employees to undergo health screenings such as temperature checks or COVID-19 testing before returning to work, the employer must count that time as hours worked. Time spent receiving a COVID-19 vaccine will also be considered hours worked if the employer requires employees to receive the vaccine to return to or continue their employment. Thus, not only must the employer compensate the employee for time spent receiving required medical testing or vaccines, but it must also add them to the hours the employee worked during the workweek when calculating overtime hours.

The COVID-19 pandemic has also affected the calculation of an employee’s regular rate of pay, primarily in circumstances where the employer pays hazard pay. An employee’s regular rate of pay is typically calculated by taking the total compensation paid to an employee in a workweek divided by the total hours worked in that workweek, with only a few statutory exceptions.[iv] Therefore, if an employer decides to pay hazard pay to its employees during the COVID-19 pandemic, that hazard pay must be included in the employee’s regular rate of pay. Thus, as a result of the hazard payments, the employee’s overtime rate will be higher than it would have been had the employee received only their base pay. It is important for employers to remember that, in the FLSA context, “regular rate” does not really mean “regular”; rather, it includes all compensation given to an employee, even irregular pay such as hazard pay.

These are just a few of FLSA-related issues that have arisen because of the COVID-19 pandemic. For more information on the interplay between the FLSA and COVID-19, please review the Department of Labor’s COVID-19 and the FLSA Q&A.[v]

[i] For more on this issue, see our previous post: COVID-19 Vaccine and the Workplace – Can Employers Require a COVID-19 Vaccine?

[ii] 29 U.S. Code § 207.

[iii] 29 CFR § 785.43.

[iv] DOL Wage and Hour Division Fact Sheet #56A.

[v] The Q&A page is available here.