Compensation, Legal Issues

What is a “9/80″ Pay Plan – and is It Right For Your Workforce?

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By John E. Thompson

A compressed schedule colloquially called a “9/80″ pay plan seems to be making a comeback.

Under this arrangement, the federal Fair Labor Standards Act “work week” and the schedule for non-exempt employees are set so that the employees work:

  • Nine (9) days in a two-work week period, but,
  • Not more than 40 hours in either work week.

How does it work?

Under a typical 9/80 arrangement, the non-exempt employee works four 9-hour days, followed by an 8-hour workday day that is split into 4-hour portions by the mid-day ending of the first work week, and then works four more 9-hour days in the second work week.

The key is that the employee’s work week ends during the 8-hour workday, causing the first four hours worked that day to fall into one work week and the remaining four hours worked that day to fall into the next work week. In this way, the employee’s hours worked in each work week do not exceed 40.

If the employee actually works exactly what the schedule calls for during the two work weeks, then no FLSA overtime pay is due for either work week.

But whatever management’s expectations might be as to the scheduled, usual, or ordinary work time for the employees, the employer still must pay FLSA overtime to every non-exempt employee who ends up working more than 40 hours in either work week.

For example, if in one work week an employee works three 9-hour days, one 10-hour day, and one 5½-hour day for a 42½-hour total in the work week, the worker would be entitled to 2½ hours of FLSA overtime pay for that work.

Other important considerations

Most employers must change the affected employees’ FLSA work week in order to adopt a 9/80 plan. As we have previously written another post, employers changing the work week should follow a U.S. Department of Labor protocol used to evaluate whether an employee has worked any FLSA overtime during the pay-period in which this change occurs in order to ensure that the worker receives the proper FLSA compensation for any such overtime.

An approach that passes muster under the FLSA must still be evaluated against, and take into account the implications of, the applicable laws of other jurisdictions in which the employer employs people.

For instance, if a state’s law requires overtime premium pay for hours worked over 8 in a workday, then the 9/80 plan will result in an obligation to pay daily overtime to employees in that state.

This was originally published on Fisher & Phillips’ Wage and Hour Laws blog.

John Thompson is a partner in the Atlanta office of the law firm Fisher & Phillips. His practice focuses on wage and hour law, assisting employers in preventive efforts designed to ensure compliance, and he handles both investigations conducted by government agencies and litigation in the wage and hour area. John has served as a Special Assistant Attorney General for wage-hour matters for the State of Georgia. Contact him at jthompson@laborlawyers.com.