As employers prepare for the Department of Labor’s new salary threshold for executive, administrative and professional exempt employees, many turn to the Fluctuating Work Week (FWW) method of calculating overtime pay. Under FWW, employers pay a fixed salary to workers who have variable regular hours and are not exempt.  The salary covers the regular rate for all hours worked, and then the employer adds only the required 50% premium for any hours over 40.  In Thomas et al v. Bed Bath and Beyond, Inc., No. 1:16-cv-08160 (S.D.N.Y.), filed Oct. 18, 2016, the plaintiffs allege that their regular hours did not actually fluctuate and their salary was not fixed.  Instead, the plaintiffs would work the same hours week after week, and, at least according to the plaintiffs’ understanding, the employer would dock their pay if they worked fewer hours than the number agreed and they had no remaining paid time off to apply to the missed hours.

Employers planning to use the FWW method should verify that the workers’ schedules actually meet the regulatory requirements. FWW is not for everyone.