On May 20, the U.S. Department of Labor’s Wage and Hour Division (WHD) announced a final rule that allows employers to offer bonuses or other incentive-based pay to employees whose hours vary from week to week.
The rule revises the regulation for computing overtime compensation for salaried, non-exempt employees who work hours that vary each week (i.e., a fluctuating workweek) under the Fair Labor Standards Act (FLSA). It also clarifies that bonuses, premium payments, commissions, and hazard pay on top of fixed salaries are compatible with the fluctuating workweek method of compensation, and that employers must include supplemental payments when calculating the regular rate of pay as appropriate under the FLSA. The final rule includes examples and minor revisions to make the rule easier to understand.
For more information about the final rule, visit www.dol.gov/agencies/whd/overtime/fww.