DOL Amends Regulation On "Fluctuating Workweek" Method Of Pay

For almost 80 years, it has been the law that an overtime-eligible employee whose hours fluctuate from week to week and who agrees to receive a fixed weekly salary covering all hours of work is entitled to a halftime premium for hours worked in excess of 40 per week-not a "time and a half" premium. The rationale is that the employee, by virtue of the fixed salary covering all hours of work, has already been paid the "straight-time" component of pay for the hours over 40. Accordingly, all that remains for the employer to pay is the "half" in the colloquial "time and a half." This is known as the fluctuating workweek ("FWW") method of calculating overtime pay.

The FWW principles were first articulated by the Supreme Court in Overnight Motor Transportation Co. v. Missel, 316 U.S. 572 (1942). In 1950, the U.S. Department of Labor ("DOL") codified the rule in the federal regulations. The modern-day version of the rule appears at 29 C.F.R. § 778.114 ("Section 114"). The