On May 20, 2020, the U.S. Department of Labor (DOL) published a final rule explaining that bonuses and other incentive payments—paid in addition to an employee’s weekly salary—are compatible with the fluctuating workweek (FWW) method of calculating overtime under the Fair Labor Standards Act (FLSA). The final rule went into effect on August 7, 2020.

On August 31, 2020, the DOL issued an opinion letter confirming that an employee’s work hours do not have to fluctuate above and below 40 hours per workweek for an employer to use the FWW method of calculating overtime pay. The opinion letter also cautioned that employers who use the FWW method generally may not “deduct from an employee’s salary for absences occasioned by the employee.” Both developments are discussed below, following the FWW refresher.
Continue Reading DOL issues new final rule and updated guidance for employers who use the fluctuating workweek method to calculate overtime