Opinion ID: 75607
Heading Depth: 2
Heading Rank: 2

Heading: What was the regular rate of pay?

Text: We next review whether Swift satisfied the first component of the exemption, which is the regular rate of pay. The “regular rate of pay” is the “hourly rate actually paid the employee for the normal, nonovertime workweek for which he is employed” and “by its very nature must reflect all payments which the 5 Automobile repair shops have been explicitly recognized as retail establishments. See 29 C.F.R. § 779.320. 10 parties had agreed shall be received regularly during the workweek, exclusive of overtime payments.” 29 C.F.R. §779.419(b) (quoting Walling v. YoungermanReynolds Hardwood Co., 325 U.S. 419 (1945)). The regular rate is determined by dividing the employer’s total compensation during the workweek by the number of hours worked. See 29 C.F.R. §779.419(b) (citing Overnight Motor Co. v. Missel, 316 U.S. 572 (1942)). Swift states that Klinedinst’s regular rate of pay was between $12 and $15 per hour. Assuming Klinedinst worked only forty hours per week, this represents at least double the then minimum wage of $5.15 per hour. See 29 U.S.C. § 206(a)(1).6 However, both parties offer contradictory statements as to the number of hours Klinedinst actually worked and both at some point during the summary judgment proceedings admit that this disagreement forms the basis of an active factual dispute. Nonetheless, neither party kept records of the number of hours Klinedinst worked. Thus, neither we nor the district court can ascertain from the record developed to date Klinedinst’s “regular rate” to compute his overtime compensation. Swift was obligated to “maintain and preserve” records of the “regular hourly rate of pay for any workweek in which overtime compensation is 6 This reflects the minimum wage for the period of January 1998 to June 1999. 11 due under [§ 207(a)] . . . . ” 29 C.F.R. § 516.2(a)(6)(i). It was also obligated to maintain records of the “[h]ours worked each workday and total hours worked each workweek.” 29 C.F.R. § 516.2(a)(7). Swift failed to do so. The number of hours worked per week is a genuine issue of material fact for the factfinder. Cf. Valley Towing Co., 515 F.2d at 111-112 (appellee failed to record applicable hourly rates or maintain records of both straight overtime hours worked and hours spent working on commission; on remand, the district judge was to order appellees to comply with the applicable record keeping requirements and determine overtime pay award since record was sufficient for this determination). As Klinedinst maintained that he worked at least 3000 hours more than the regular forty-hour week during his period of employment, this is still very much a live issue. Therefore, the district court incorrectly concluded that Klinedinst’s regular rate of pay never fell below twelve dollars per hour. In making this determination, the court improperly assumed that Klinedinst never worked more hours than the number of hours paid under the flat rate system. As both parties acknowledge, the number of hours Klinedinst actually worked did not necessarily equal the number of hours for which he was paid under the flat rate system and, in any given week, the number of hours actually worked could have been greater than or less than the number of flag rate hours for which Klinedinst was paid. See 29 C.F.R. § 778.117 12 (“Commissions (whether based on a percentage of total sales or of sales in excess of a specified amount, or on some other formula) are payments for hours worked and must be included in the regular rate. This is true regardless of whether the commission is the sole source of the employee's compensation or is paid in addition to a guaranteed salary or hourly rate, or on some other basis . . .”). As a result, the assumption of a static forty-hour work week was error. Without knowing the regular rate of pay, we cannot determine whether it is greater than one and one half times the minimum wage. Hence, remaining factual inquiries preclude the legal determination of whether the section 207(i)(1) element of the overtime payment exception is satisfied.