A federal court in Pennsylvania recently held that the
"fluctuating workweek method" of calculating overtime
compensation violates Pennsylvania's Minimum Wage Act (PMWA),
34 Pa. Code. § 231.43(d)(3). See Foster v. Kraft Foods
Global, Inc., No. 2:09-cv-00453 (W.D. Pa. Aug. 27, 2012).
Under the fluctuating workweek method, a non-exempt (or
"overtime eligible") employee is paid a fixed weekly
salary, regardless of the number of hours worked. Then, for
overtime, the employee is paid one-half times his or her regular
rate (a calculation of the employee's weekly salary divided by
the number of hours actually worked in the week) multiplied by the
number of overtime hours worked, as opposed to the traditional
overtime calculation of one and one-half times the regular rate.
Some employers have utilized the fluctuating workweek method
because it can result in significant overtime savings compared to
the traditional "time and a half" model.
