Specifically, the DOL made clear that bonus and premium payments
are compatible with the use of the fluctuating workweek method of
compensation.
On May 20, 2020, the U.S. Department of Labor
(DOL) unveiled a final rule that updates the "fluctuating
workweek" method of calculating overtime compensation under
the Fair Labor Standards Act (FLSA). The final rule, which followed
the DOL's Notice of Proposed Rulemaking in
November 2019, allows employers to include incentive-based
payments such as bonuses, premium payments and other additional pay
of any kind. The rule revamps the DOL's existing regulatory
framework for how overtime is calculated under the FLSA for
salaried workers who are not exempt from overtime and whose hours
vary every week. Specifically, the rule clarifies that payments in
addition to the fixed salary are compatible with the use of the
fluctuating workweek method of compensation, and that such payments
must be included in the calculation of the
