Wage law for working 36 hours, but paid for 40

Our company is considering a shift to work three 12 hour days for a total of 36 hours, but paying these employees for 40 hours. Can we do this, and if so how would we handle their time off for sick or personal?

For example if an employee on this shift worked 32 hours instead of the 36 required hours, would he forfeit the 4 "free" hours and be paid for 32 or would we pay 32 hours worked plus 4 "free" hours for a total of 36 instead of 40?

Also, would overtime be paid at time over 36 hours worked, or over 40 hours worked.

Thanks for the help.

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