Fluctuating Work Week Ripoffs

The fluctuating workweek method is a formula for calculating overtime. Another name used for the fluctuating workweek method is “Chinese overtime.” However, for obvious reasons, courts no longer used that term.

The fluctuating workweek method applies to non-exempt employees only. Employees properly classified as exempt from overtime are not legally entitled to any overtime pay. For more information about overtime exemptions, see our page on that subject.

It is legal under federal law and the laws of most states to pay workers using the fluctuating workweek method. However, the employer must comply with all legal requirements to use this special method of pay.

 This formula allows an employer to save money on overtime costs. Compared to the standard overtime calculation method, an employee paid under the fluctuating workweek method could be earning hundreds of dollars less per week.  However, when employers fail to follow the strict rules required to use this method of payment, the fluctuating workweek calculation may not apply. In that case, the employer may have to pay its workers using the standard calculation method.

Two Times Where Employers Use the Fluctuating Workweek Method

Here are two ways that employers save money using the fluctuating workweek method. 

First, an employer can pay a fixed salary and an additional half time of the employee’s hourly rate for overtime hours based on the number of hours worked. instead of paying an hourly rate plus time and half for overtime hours over 40, using the fluctuating workweek method.

Second, the hourly rate is not based on a forty hour workweek. Instead it is based on the number of hours the employee actually works.  If an employee’s base salary is $1,000 per week and she works forty hours per week, her hourly rate is $25.00.  If she receives the same base salary but works fifty hours, her hourly rate is only $20 per hour. 

The Most Common Fluctuating Workweek Violations

Violations of the fluctuating workweek rules most often occur under these circumstances:

1. The employee works a regular schedule and her hours do not fluctuate.
2. The employer fails to include all proper payments to the employee when calculating the hourly rate. The proper calculation of the hourly rate must include certain commissions, bonuses, and holiday pay.
3. The employer fails to pay employees a fixed salary that does not vary with the number of hours worked.
4. The employer fails to pay employees an additional half-time for all hours worked over forty hours per week.
5. The employee works so many hours in a week that the hourly rate falls below the minimum wage.
6. The employer and employer did not have a clear mutual understanding that the fixed salary covers all hours worked.

If your employer failed to pay you at the proper rate, contact the Marlborough Law Firm for a free consultation