What is a Fluctuating Work Week for Overtime Laws?
If you are paid a set salary no matter how many hours you work in a week, and your number of hours varies from week to week, and you have agreed to this, your employer can use a method called the "fluctuating work week" to calculate your rate of overtime pay.
Under this method, the set salary for the week is divided by the total hours worked in the week (including overtime hours) to arrive at a regular rate of pay. The employee is then entitled only to the overtime premium- 0.5% of the hourly rate- for the extra hours. This method assumes the agreed salary covers "straight time" for all hours, and that the only thing owed is the 0.5% premium.
Under this method, an employee making $700 per week and worked 48 hours would be paid "straight time" for all 48 hours at $14.5 per hour, and $7.29 per hour for the additional 8 hours.
This is clearly a more favorable calculation for the employer, and is not appropriate or legal in all circumstances. If you are being paid overtime under the fluctuating work week method, you should consult an employment lawyer to find out if this is a lawful practice.
Learn more here about calculating overtime pay under Massachusetts and federal law.
Need Help With an Overtime Question?