On Dec. 5, ABC submitted comments to the U.S. Department of Labor’s Wage and Hour Division in support of its proposal to revise the DOL’s regulation for computing overtime compensation for salaried nonexempt employees who work hours that vary each week (i.e., a fluctuating workweek) under the Fair Labor Standards Act.
According to a DOL news release, the proposal clarifies that bonus and premium payments on top of fixed salaries are compatible with the fluctuating workweek method of compensation, and that supplemental payments must be included when calculating the regular rate of pay as appropriate under the FLSA. The proposed rule also adds examples to the regulation to illustrate the fluctuating workweek method of calculating overtime where an employee is paid a night shift differential and a productivity bonus in addition to a fixed salary.
In its comment letter, ABC applauded the department’s efforts to clarify that bonus payments, premium payments and other additional pay incentives over and above any fixed salary are consistent with the fluctuating workweek method of compensation. ABC further agrees with the department’s rejection of any distinction between “hours-based” or “productivity-based” incentive compensation in applying the fluctuating workweek method of payment.
ABC also pointed out in its letter that it would be helpful for the department to clarify that examples given in the final rule are just that: examples. The department should make clear that examples given do not impose limitations, restrictions or other conditions on applying the overtime calculation.