There are two ways an FLSA covered employer may pay a nonexempt employee a fixed salary: the employer may pay a salary for a specific number of hours each week or the employer may pay a salary for whatever number of hours are worked in the week.  Payment of a fixed salary for fluctuating hours of work – referred to as a Fluctuating Workweek – is permitted by existing Department of Labor (DOL) guidelines at 29 CFR section 778.114, subject to certain conditions, including a mutual understanding of the parties regarding the compensation arrangement.

Importantly, under a valid Fluctuating Workweek, the employer need only pay one half (0.5) the regular rate for each hour worked in excess of forty per week, instead of time and one half (1.5) the regular rate.  (For more on the regular rate, click here.)   The halftime premium for overtime hours would be paid in addition to the fixed salary.  Referred to as the Fluctuating Workweek Method of Calculating Overtime, this arrangement benefits employees by providing them with a fixed salary despite fluctuating hours of work and benefits employers by reducing overtime costs.

Despite its benefits, the Fluctuating Workweek Method has been challenged in courts and its application is unclear.  For this reason, on November 4, 2019, the DOL proposed new guidelines on the requirements of the Fluctuating Workweek Method of Calculating Overtime.  The new guidelines are expressly intended to make it easier for employers to apply this method in the modern workplace.  To read the proposed rulemaking, click here.

The main thrust of the DOL’s proposed rule is that additional pay of any kind on top of the fixed salary is compatible with the Fluctuating Workweek Method.  Presently, courts have issued conflicting decisions on whether add-on pay disqualifies employees from the Fluctuating Workweek Method.  Under the DOL’s proposed rule, employees would be eligible for the Fluctuating Workweek method regardless of whether they receive bonuses, additional hourly pay, additional lump sum pays, premiums, shift differentials, and/or incentive-related sums.

The DOL’s proposed rule does not, however, clarify exactly what it means for workweek hours to fluctuate sufficiently to qualify for this method of compensation.  But the DOL’s proposed rulemaking document does state that an employee who works a “usual” number of hours may still be paid under the Fluctuating Workweek Method if there is some weekly variation in the number of hours worked.  In this way, the Fluctuating Workweek Method may be most appropriate for employees who are transitioning from exempt to non-exempt status but wish to retain their fixed salary or salaried status.  Employers considering the Fluctuating Workweek Method of Calculating Overtime should consult with legal counsel prior to making any changes to employee compensation.  Change to represented employee compensation is a mandatory subject of bargaining under California’s Meyers-Milias Brown Act.

The DOL has requested comments on these proposed changes.  Comments are due by December 5, 2019.  Those interested can submit their comments online.

LCW will continue to monitor the comment period and will provide further updates as needed.  Please visit our website at for regular briefings on the FLSA.

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Photo of Lisa S. Charbonneau Lisa S. Charbonneau

Lisa represents public agencies throughout the state as a negotiator, litigator, and trusted advisor in all matters pertaining to labor and employment law.  She has extensive experience in Fair Labor Standards Act (FLSA) and wage and hour compliance, labor relations, collective bargaining, MOU…

Lisa represents public agencies throughout the state as a negotiator, litigator, and trusted advisor in all matters pertaining to labor and employment law.  She has extensive experience in Fair Labor Standards Act (FLSA) and wage and hour compliance, labor relations, collective bargaining, MOU audits, PERB practice, and public employee disciplinary matters.  She also represents independent schools and non-profits in wage and hour matters.

Lisa has served as lead negotiator for small and large public agencies in labor negotiations with public safety unions and numerous other employee associations and organizations, including Teamsters, SEIU, AFSCME, police/deputy sheriffs associations, and the International Association of Firefighters.  Lisa takes a hands-on approach to bargaining and strives to be highly responsive to the unique needs of each client and their governing body.

Lisa also has an extensive litigation background in federal and state court, and has achieved successful results for clients in matters ranging from wage and hour to First Amendment retaliation.  As one of the firm’s FLSA litigators, Lisa has represented numerous cities, counties, and special districts in FLSA collective actions throughout the state.  She has also represented clients in arbitrations and fact-finding hearings, as well as before the Public Employee Relations Board, the California Labor Commissioner, the U.S. Department of Labor, the California Department of Fair Employment and Housing, and the Equal Employment Opportunity Commission.

A significant part of Lisa’s practice involves counseling clients on the meet and confer process and FLSA issues.  She also conducts FLSA audits for clients, which range in scope from reviewing employer compliance with discrete wage and hour laws to assisting with payroll system upgrades and modifications to achieve compliance with wage and hour laws.  Her practice also includes training on such subjects as ethics, discrimination and harassment, FLSA compliance, the collective bargaining process, and the Brown Act.

Lisa serves on the Executive Committee of the firm’s Wage and Hour Practice Group and has taught LCW’s FLSA Academy since its inception.

Lisa received her JD from U.C. Hastings College of the Law in 2006 and was admitted to the California State Bar in December of that year.  While at Hastings, Lisa served as an Equal Justice America fellow and received a grant to work on community economic development issues for the City of Detroit.  Lisa earned her Bachelor of Arts with Honors in Government from Wesleyan University in Middletown, Connecticut, and soon after that worked at a bi-weekly political magazine in Washington, D.C. until she began to pursue her law degree.