The U.S. Labor Department's April 5 Final Rule attempts to transform the
principles of fluctuating-workweek pay plans in two ways.
Remarkably, DOL apparently plans to do so, not by facing
up to these matters by actually proposing a straightforward
revision of the relevant interpretative provision at 29 C.F.R.
§ 778.114, but instead via remarks in the
preamble accompanying the Final Rule.
The Basic Concepts
A non-exempt employee's FLSA overtime pay must be based upon
his or her regular hourly rate. This is determined by dividing the
employee's total compensation for a workweek by the total
number of hours worked for which the compensation was paid.
See 29 C.F.R. § 778.109.
Under a fluctuating-workweek plan, the employee receives a
salary that is paid as straight-time compensation for all of his or
her hours worked in a workweek, however many or few, including
hours worked over 40. Thus, for overtime hours, the employee is due
only an additional one-half of the
