## Facts

- Browning-Ferris, Inc. employed drivers and “hoppers” on waste-collection and recycling routes.
- Employees were paid a flat day rate: a guaranteed full day’s pay for each day worked, regardless of the number of hours worked that day.
- Employees were paid only for days actually worked; compensation was not structured as a fixed weekly salary.
- The company calculated overtime using 29 C.F.R. § 778.112 (day-rate workers): (1) total weekly day-rate pay divided by total weekly hours to determine the week’s regular rate; (2) an additional one-half of that regular rate for each hour over 40.
- Employees filed a collective action under the Fair Labor Standards Act (FLSA), alleging the method failed to pay proper overtime because the computed regular rate decreased as weekly hours increased.
- The district court granted summary judgment for the employer, finding the workers were paid on a day-rate basis and the overtime calculation complied with § 778.112.

## Issues

1. Whether employees paid a flat day rate may have overtime calculated under 29 C.F.R. § 778.112 consistent with the FLSA.
2. Whether paying an additional one-half of the derived regular rate for hours over 40 satisfies the FLSA’s requirement of overtime at not less than one and one-half times the regular rate.
3. Whether the employees’ compensation was properly characterized as day-rate pay (rather than hourly pay) for overtime purposes.

## Decision

- The Fifth Circuit affirmed summary judgment for Browning-Ferris, Inc.
- The court held that 29 C.F.R. § 778.112 supplies a permissible method for computing overtime for day-rate employees.
- Because the employees were paid a flat sum per day regardless of hours, the employer properly treated them as day-rate workers under § 778.112.
- The court rejected the argument that a declining derived regular rate renders the method unlawful; the regulation’s formula still produces total pay equaling one and one-half times the week’s regular rate for each overtime hour.

## Legal Principles

- Under the FLSA, the overtime premium is measured against the employee’s “regular rate” for the workweek.
- For day-rate compensation covered by 29 C.F.R. § 778.112, the regular rate is computed by dividing total weekly day-rate earnings by total hours worked in that week.
- When a day rate compensates all hours at straight time, the FLSA overtime requirement is satisfied by paying an additional one-half of the computed regular rate for each hour worked over 40.
- Week-to-week variation in the derived regular rate—including decreases when more hours are worked—does not, by itself, violate the FLSA if the required premium is paid based on that week’s regular rate.
- Courts look to the actual pay structure (flat per day versus hourly) in deciding whether § 778.112 applies.

## Conclusion

The Fifth Circuit held that employees paid a flat day rate may have overtime calculated under 29 C.F.R. § 778.112, and that paying an additional one-half of the derived weekly regular rate for each hour over 40 complies with the FLSA’s time-and-one-half requirement.


Dufrene v. Browning-Ferris, Inc., 207 F.3d 264 (5th Cir. 2000)