Alternate Work Schedules: The 9/80 Pay Plan

Recently one of my colleagues asked a question about the Fair Labor Standards Act (FLSA) implications of a 9/80 pay plan that a client wanted to implement.  What is the 9/80 pay plan?  It is one of many alternative schedules that employers implement.  Along with 4/10s and 4-on/4-off schedules, it is one of the resurgent alternatives to the standard 5-day, 40-hour workweek we’ve all grown to love.  Under the 9/80 pay plan, non-exempt employees work nine days out of ten in a two-week pay period, but their workweek is structured in a way that they work no more than 40 hours in either week.

Structuring the 9/80 Pay Plan

Under the 9/80 pay plan, a non-exempt employee works four 9-hour days, followed by an 8-hour workday day during a single workweek.  If you’re doing the math (I went to law school to avoid doing the math…), you are wondering if I have lost it, since 4 9-hour days plus one 8-hour day equals 44 hours not 40.  However, that is the key to the 9/80 workweek.  Under this approach, you start your workweek in the middle of the 8-hour shift.  To use a simple example, assume that the non-exempt employee works from 8 a.m. until 4 p.m. each workday.  To make the 9/80 shift work, your workweek would need to reset at noon on Friday.  Setting a Friday noon to Friday noon workweek means that the last 8-hour shift is split into 4-hour portions; 4 hours fall into Week 1 and 4 hours fall into Week 2.  This is the only way that a non-exempt employee could work a 9/80 schedule without incurring overtime under the FLSA.

The Reality of the 9/80 Pay Plan

Realistically, though, the 9/80 pay plan rarely works out this cleanly.  In my experience, employers who use 9/80 pay plans end up paying overtime during one or both weeks, and simply use the plan to provide some additional flexibility for employees.  If that is the case, then there is no problem. However, in many cases, trying to split that fifth day down the middle ends up being nothing more than an overtime avoidance mechanism, which can create some liability for employers.  Of course, regardless of whether you expect employees to work a true 9/80 shift, they might incur overtime anyway when they end up working more than 40 hours in either workweek.

Upshot for Employers

In almost all cases, the 9/80 pay plan requires employers to change the start/end date of the workweek.  Changes that you make purely to avoid overtime obligations will be difficult to defend before courts and administrative agencies.  Even if you can show a business justification for the change, remember that you need to use the DOL’s preferred protocol for determining whether you have an overtime obligation during the pay period when you make the change to avoid any unmet FLSA overtime obligations.  Of course, state and local laws may impose additional overtime obligations as well.  For all of these reasons, employers should look at the 9/80 pay plan as a way to provide some flexibility for employees, not as a way to drastically reduce overtime expenses.

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