FLSA: Four weeks does not a month make

Posted September 23, 2019

In a September 10, 2019 opinion letter, the Department of Labor’s Wage and Hour Division (WHD) answered a question regarding retail or service establishments from the overtime pay requirement under the Fair Labor Standards Act (FLSA) if it used four weekly pay periods or two bi-weekly pay periods to represent the “not less than one month” requirement.

The question asked of the WHD revolved around Section 7(i) of the FLSA, which exempts an employee of a retail or service establishment from the overtime pay requirement of the FLSA if:

• The regular rate of pay of such employee is in excess of one and one-half times the minimum hourly rate applicable to him under section 206 of this title, and
• More than half his compensation for a representative period (not less than one month) represents commissions on goods or services.

The specific question was whether four weekly pay periods or two bi-weekly pay periods (four workweeks) be considered a valid representative period of “not less than one month” for purposes of the FLSA Section 7(i) exemption.

If not, continued the questioner, would a representative period of six consecutive weekly pay periods or three bi-weekly pay periods constitute a valid representative period since it is “not less than one month” (even if the six weeks do not capture an entire calendar month)?

The WHD responded that the period proposed by the first question — four weekly pay periods or two bi-weekly pay periods — is not a calendar month (with the exception of either period beginning in February of a common year) and, therefore, would not satisfy the statutory requirement that the representative period be at least one month.

The second period of six consecutive weekly pay periods or three consecutive bi-weekly pay periods, on the other hand, do satisfy the statutory minimum period of not less than one month, i.e., one calendar month. That would be the case even if the six consecutive weeks or the three bi-weekly periods do not capture all the days in a given month. The ordinary meaning of the phrase “not less than one month” is not limited to a period encompassing all the days within one of the twelve named months of the year.

Therefore, the exemption requires the conclusion that six, but not four, consecutive weekly pay periods satisfy the retail or service establishment exemption's requirement that a representative period be not less than one month. It similarly requires the conclusion that three, but not two, consecutive bi-weekly pay periods satisfy the retail or service establishment exemption's requirement that a representative period be not less than one month. Of course, such a six-week period must also be “representative” and other criteria must be satisfied for the exemption to apply.

This article was written by Darlene M. Clabault, SHRM-CP, PHR, CLMS, of J. J. Keller & Associates, Inc.