DOL Revises Overtime Regulation Addressing Fluctuating Workweeks

Volume: 19 | Issue: 29
May 26, 2020

The U.S. Department of Labor’s Wage and Hour Division (DOL WHD) has revised its regulation that addresses computing overtime compensation for salaried, non-exempt employees whose hours vary each week under the Fair Labor Standards Act (FLSA). The WHD explains that the fluctuating workweek regulation, 29 C.F.R. § 778.114, has been changed to “grant[] employers greater flexibility to provide bonuses or other additional compensation to nonexempt employees whose hours vary from week to week, and eliminate[] any disincentive for employers to pay additional bonus or premium payments to such employees.” The regulation now expressly states that employers can pay bonuses, premium payments, or other additional pay, such as commissions and hazard pay, to employees compensated using the fluctuating workweek method of compensation and explains that such supplemental payments must be included in the calculation of the regular rate unless they are otherwise excludable under the FLSA. The regulation sets forth examples and has been revised “to make it easier to read, so employers will be able to better understand the fluctuating workweek method.”

If you have questions about fluctuating workweek overtime calculations, please contact a KZA attorney.

KZA Employer Report articles are for general information only; they are not intended and should not be construed to be legal advice. Reading or replying to such articles does not establish an attorney-client relationship. In addition, because the subject matters and applicable laws discussed in Employer Report articles are often in a state of change and not always applicable to every type of business entity or organization, readers should consult with counsel before making decisions based on the same.

Subscribe to the KZA Employer Report