NPRM: Fluctuating Workweek Method of Computing Overtime

On November 4, 2019, the U.S. Department of Labor announced a proposed rule that would allow job creators to offer bonuses or other incentive-based pay to employees whose hours vary from week to week. The proposal would clarify that payments in addition to the fixed salary are compatible with the use of the fluctuating workweek method under the Fair Labor Standards Act (FLSA).

In this Notice of Proposed Rulemaking (NPRM), the Department:

  • Proposes to revise its existing fluctuating workweek regulation at 29 CFR 778.114;
  • Clarifies the regulation by expressly stating that any bonuses, premium payments, or other additional pay of any kind are compatible with the fluctuating workweek method of compensation and that such payments must be included in the calculation of regular rate unless excludable under FLSA sections 7(e)(1)-(8);
  • Adds examples to better illustrate how the regulation works operationally;
  • Revises the regulation to increase readability; and
  • Proposes a title change to the regulation to better reflect the purpose of the subsection.

The NPRM (RIN Number: 1235-AA31) will be available for review and public comment for 30 days. The Department encourages interested parties to submit comments on the proposed rule. Anyone who submits a comment (including duplicate comments) should understand and expect that the comment, including any personal information provided, will become a matter of public record and will be posted without change to

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