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Report Link Tenth Circuit Endorses "Fluctuating Workweek" Method of Calculating Overtime for Misclassified Salaried Employees.Littler Mendelson, P.C. - July 14, 2008 In a decision that could lead to significant litigation cost savings for employers, the United States Court of Appeals for the Tenth Circuit endorsed the "fluctuating workweek" method of calculating back pay awards for misclassified salaried employees in lawsuits arising under the Fair Labor Standards Act (FLSA). In Clements v. Serco, Inc., 2008 U.S. App. LEXIS 13806 (10th Cir. July 1, 2008), the Tenth Circuit held that the district court properly used the fluctuating workweek method to calculate a back pay award for unpaid overtime, rather than the alternative "time-and-a-half" formula, because the parties had a "clear mutual understanding" that the plaintiffs would be paid a fixed salary regardless of the number of hours they worked each workweek. In addition, the court joined the First and Fourth Circuit Courts of Appeals in rejecting the proposition that the fluctuating workweek method applies only where the parties also had a "clear mutual understanding" as to how overtime pay would be calculated. Report Link Courts Approve Method for Calculating Overtime that Can Reduce Overtime Costs (pdf).Vedder Price - July 19, 2006 The FLSA normally requires employers to pay
nonexempt employees time and one-half their regular
rate of pay for all hours worked over 40 in a workweek.
Under the “fl uctuating workweek” method, however,
employers who meet certain requirements may pay
nonexempt employees a fi xed salary for all hours
worked and compensate them at one-half their
regular hourly rate for all hours worked over 40 in the
workweek. This can mean less overtime pay for the
employee and less overtime expense for the employer. Report Link Alternative Workweek Schedules: What Are the Rules?Jackson Lewis LLP - April 12, 2005 The maximum number of daily hours that may be regularly scheduled as part of an alternative workweek is currently the subject of debate. For most employers, the California DLSE has taken the position that the maximum number of daily hours regularly scheduled in an alternative workweek is 10. Report Link 29 CFR 778.114 - Fixed salary for fluctuating hours.Department of Labor - (No Date) FLSA regulation regarding the payment of a fixed salary for fluctuating hours.
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October 14, 2008 Ballard Rosenberg |
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