The DOL is close to releasing changes to overtime pay rules that could be a game-changer for companies and employees alike.
Watch for updated rules on the fluctuating workweek method of calculating overtime pay to be released soon. The U.S. Department of Labor (DOL) sent a proposal on this to the White House Office of Management and Budget (OMB) this summer, and the OMB has completed its review. The specifics of the rule won’t be available to the public until its publication in the Federal Register. However, there are some details to help you get prepared for this change, whatever the details are.
Under this fluctuating workweek method, an employer and non-exempt employee can agree that the worker will get a fixed weekly salary, which is divided by the number of hours that person worked in the week to arrive at the week’s base hourly rate. The worker then receives an additional 0.5 times this base rate for each hour beyond 40 he or she worked that week. This method isn’t currently available to employers who compensate their employees with bonuses or other incentive-based pay.
The DOL’s Wage and Hour Division (WHD) has proposed to revise the fluctuating workweek regs to give employers greater flexibility to provide additional forms of compensation to employees whose hours vary from week to week. This change, its proponents suggest, would particularly benefit employers whose current methods of payment to non-exempt employees isn’t based fully or partly on a traditional time-based method.
The fluctuating workweek calculation method differs from standard Fair Labor Standards Act (FLSA) rules, in which non-exempt employees must receive overtime pay for hours beyond 40 worked in a week by at least time and one-half their regular rate of pay (standard calculation of overtime).
InFront will provide updates on this issue as soon as they are available. In the meantime, consider taking time to discuss this potential change to determine if and how it might benefit your organization.