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News | Apr 10, 2011

DOL Refuses To Allow Companies to Utilize the Fluctuating Workweek Method for Employees Who Receive Bonus or Premium Payments

I was just reading DOL’s Final Rule publication regarding the upcoming changes to the FLSA regulations. This Final Rule was published in the Federal Register on April 5, 2011. In my view, the most significant decision reflected in the Final Rule is the Departments refusal to implement regulatory language opining that the payment of bonuses and other premium payments to a salried employee does not disqualify an employee from being paid under the fluctuating workweek method (“FWM”) of overtime compensation (29 CFR 778.114). In this regard, the Department refused to disrupt the holdings by various courts that such payments disqualify the employer from using the FWM. See, e.g., O’Brien v. Town of Agawam, 350 F.3d 279 (1st Cir. 2003); Adeva v. Intertek USA, 2010 WL 97991 (D.N.J. 2010); Dooley v. Lin=berty Mutual Ins. Co., 369 F. Supp. 2d 81 (D. Mass. 2005); Ayers v. SGS Control Services, Inc., 2007 WL 646326 (S.D.N.Y. 2007).

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