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9th Circuit Joins Consensus That Workweek is Measure of Wage Compliance

Customer service representatives at Xerox Business Services earn their wages depending on the task before them and how long it took to complete that task. Attendance at training and meetings were paid a flat rate whereas other assignments were paid based on a variable rate. The variable rate was based on such factors as the length of the calls and customer satisfaction. At the end of the workweek, Xerox tallied up each employee’s total wages and divided it by the number of hours that the employee worked. If the amount added up to less than minimum wage, then Xerox added a subsidy to bring the wages up to the correct amount. If the amount exceeded the minimum wage, Xerox did not pay the employee anything more.

The Xerox employees challenged the wage calculations, claiming that the Fair Labor Standards Act (FLSA) demanded that employees be paid minimum wage for each hour that they work. Under Xerox’s system, some hours worked were not compensated at minimum wage.

Joining the D.C. Circuit, Second, Fourth, and Eighth Circuits, the Ninth Circuit ruled against the Xerox employees. Compliance with FLSA required that the total number of hours worked each work week average out to equal the minimum wage. The circuit court was only able to find two other district court that came to a different conclusion. Noting that the original text of the law provides little guidance, the Ninth Circuit chose to follow the reasoning of the other circuits and the Department of Labor (DOL). The DOL has explicitly supported the calculation of minimum wage based on the workweek.