The Employer’s Wage and Hour Advisor

The United States Department of Labor’s long-anticipated revisions to the Fair Labor Standards Act’s (FLSA) overtime regulations may become effective sooner than expected. The Department announced on March 14, 2016 that it submitted its final overtime rules to the Office of Information and Regulatory Affairs (OIRA), part of the Office of Management and Budget. Once OIRA signs off on the final rules, publication could take place as early as April or May. The Department of Labor previously estimated publication would take place in July of 2016. 

Under the Fair Labor Standards Act (FLSA), a non-exempt employee generally must be paid time and a half (1.5x) his or her regular rate of pay for all time worked in excess of 40 hours in a workweek.  The law nevertheless provides some exceptions. One such exception is the “fluctuating workweek method” for calculating overtime (FWW method). Using the FWW method, an employer need only pay an employee half (0.5x) his or her regular rate of pay for every hour over 40. This method makes pay more predictable and less variable to an employee where his or her hours fluctuate week-to-week.