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Total Articles: 15

Fifth Circuit Limits Use of Fluctuating Workweek

Employers who rely on the fluctuating workweek method to calculate overtime for employees should take a few minutes to review a new ruling from the Fifth Circuit Court of Appeals that draws some new lines around when the method may be used. Hills v. Entergy Operations, Inc. (5th Cir., Case No. 16-30924, Aug. 4, 2017).

USDOL Should Retract Fluctuating-Workweek Commentary

Readers will recall that, in 2011, the U.S. Department of Labor undertook to discourage the use of fluctuating-workweek pay plans under the federal Fair Labor Standards Act.

Fluctuating-Workweek Plans: Don't Forget State Law!

Many employers have responded to the U.S. Department of Labor's ongoing efforts to increase the pay-related requirements for the federal Fair Labor Standards Act's "white collar" exemptions by making tough decisions about employees' compensation going-forward.

Straightening Out the Fluctuating Hour Workweek: Evaluating the Risks and Benefits of One Method of Overtime Payment

With the Department of Labor’s recent changes to the salary threshold for white-collar exemptions set to take effect on December 1, 2016, many employers are struggling to find the best option for how to comply with the new regulations without breaking the bank. One lesser-known alternative that is receiving increased attention from many companies is the fluctuating workweek method of payment for non-exempt employees.

Two Fluctuating-Workweek Variations

We have said for a while now that a "fluctuating workweek" pay plan might suit some employers' needs as to workers whom they will no longer treat as overtime-exempt in light of the U.S. Labor Department's coming federal Fair Labor Standards Act exemption changes.

First Circuit Approves Use of FWW Method for Pay That Varies Due to Performance-Based Commissions

The First Circuit Court of Appeals recently affirmed a lower court’s decision that an employer may use the fluctuating workweek method to calculate overtime pay rates even when an employee’s weekly pay varies because of performance-based commissions. Lalli v. General Nutrition Centers, Inc., No. 15-1199 (February 12, 2016).

Some Additional Thoughts on "Half-Time" Overtime: The Fluctuating Workweek Method

Last week, we discussed the fluctuating workweek method and its possible benefits. Remember that the fluctuating workweek method is not a "save lots of overtime expenses method." Employers who use the fluctuating workweek to clamp down on overtime expenses often end up shifting those expenses from the payroll budget to the litigation budget.

"Half-Time" Overtime: The Fair Labor Standards Act's Fluctuating Workweek Method [Wage & Hour FAQs]

In the past, we have discussed how to calculate paying overtime to salaried, non-exempt employees, including those employees who also receive commissions. One area that we have not touched on is a potentially employer and employee friendly method of calculating overtime that is nonetheless fraught with some risk: the fluctuating workweek. As you know if you read us regularly, simply paying an employee a salary does not mean that the employee is automatically “exempt” from the Fair Labor Standards Act (FLSA) overtime requirements, or parallel requirements in state and (increasingly) local law. Paying an employee on a salary basis is just one part of the test for exemptions, as we have explained in our recurring Wage and Hour Basics series.

Supposed Fluctuating-Workweek "Legal Prerequisites" Come From Where, Exactly?

"Fluctuating workweek" pay plans are provoking much litigation under the federal Fair Labor Standards Act. These arrangements call for a non-exempt employee to be paid a salary as straight-time compensation for all hours worked in a workweek, including those over 40. The salary represents the "one" of "one and one-half, so for overtime hours the employee is due an additional one-half of the hourly rate figured by dividing all of the workweek's worktime into the salary (that rate can never be less than the minimum wage, of course).

The Fifth Circuit Giveth and Then Taketh Away: Another Perspective on Fluctuating Workweeks in Overtime Cases

In the course of two months, two separate Fifth Circuit panels have issued decisions that call into question the application of the fluctuating workweek (FWW) method in suits for unpaid overtime based on misclassification.

Fluctuating-Workweek Ruling Might Be Reviewed

Last month's "Fuzzy Thinking" post mentioned Sisson v. RadioShack Corp., in which a lower federal court in Ohio deferred to the U.S. Labor Department's 2011 allegation that paying performance bonuses is purportedly "incompatible" with a fluctuating-workweek compensation plan under the federal Fair Labor Standards Act. Finding that the issue is a novel one, the court has now granted RadioShack's request to put the case on hold and to allow an immediate review by the Sixth Circuit U.S. Court of Appeals (copy of ruling linked below).

Fuzzy Thinking About Fluctuating-Workweek

In 2011, the U.S. Labor Department did its best to discourage the use of fluctuating-workweek pay plans under the federal Fair Labor Standards Act. It undertook this in a grab-bag release collectively titled "Final Rule", which also dealt with numerous FLSA matters unrelated to fluctuating-workweek plans. In accompanying remarks in the preamble to this document, USDOL said that these plans are supposedly "incompatible" with the payment of bonuses or comparable sums.

Supreme Court Rules Dismissal Of FLSA Collective Actions Are Appropriate When Individual Claim Is Rendered Moot

On April 16, 2013 the U.S. Supreme Court upheld the concept that a wage and hour collective action brought pursuant to the Fair Labor Standards Act (FLSA), can be dismissed for lack of subject matter jurisdiction when the named plaintiff’s claim is rendered moot – in this case by virtue of the plaintiff being offered complete relief through an offer of judgment made pursuant to Rule 68 of the Federal Rules of Civil Procedure. Genesis HealthCare Corp. v. Symczyk.

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.
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