Total Articles: 3
Fluctuating-Workweek Follies: First Principles Are Unchanged
The U.S. Labor Department's unfounded April fluctuating-workweek commentary (earlier post here) continues to complicate many pre-existing pay plans and to cause employers to narrow their views of the available compensation alternatives. This is the foreseeable (and apparently intended) result of what DOL said. Unfortunately, some observers are compounding the impact of DOL's commentary by suggesting that its ramifications are more dire than ought to be the case.
DOL Seeks To Undermine Fluctuating-Workweek Plans
The U.S. Labor Department's April 5 Final Rule attempts to transform the principles of fluctuating-workweek pay plans in two ways. Remarkably, DOL apparently plans to do so, not by facing up to these matters by actually proposing a straightforward revision of the relevant interpretative provision at 29 C.F.R. § 778.114, but instead via remarks in the preamble accompanying the Final Rule.
Courts Approve Method for Calculating Overtime that Can Reduce Overtime Costs (pdf).
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.
