On August 31, 2020, the U.S. Department of Labor (DOL) issued an opinion letter addressing whether employees’ hours must fluctuate above and below 40 hours per week to qualify for the fluctuating workweek method (FWM) of calculating overtime pay. Although this post is primarily for employers who have already instituted the FWM, if you’re curious on what the FWM is or how it works, check out my previous post. Additionally, the DOL recently issued a rule allowing employers to pay bonuses, premium payments, or other additional pay to FWM employees, which I also wrote a post about.
As to the opinion letter prompting this post, the DOL recently concluded that the FWM requires only that an employee’s hours worked fluctuate from week to week—not that they fluctuate above and below 40 hours worked per week. This means, assuming the employee meets all other qualifying conditions, that an employee may qualify for the FWM even if they are always working more than 40 hours per week but their overtime hours fluctuate (e.g. 41 hours one week, 52 the next). There is no requirement for an employee’s hours to dip below 40 hours per work for an employer to use the FWM.
The DOL also noted that employers using the FWM may not deduct an employee’s pay for absences, even once the employee has exhausted their sick leave or have not banked enough sick leave to cover an absence, with the exception of occasional disciplinary deductions for willful tardiness/absences or infractions of major work rules.