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The Fluctuating Work Week

March 21, 2012 by The Sawaya Law Firm

Rarely Anything But an Attempt to Under-Pay Workers

I have litigated in the employment law area for over 30 years, and rarely have I seen a good faith example of a company properly using a “fluctuating work week” program that would stand up to scrutiny under controlling Federal Labor Standards Act (FLSA) law, and meet the requirements of 29 C.F.R. 778.114 (fixed salary for fluctuating hours).

At a minimum, national and Colorado workers subjected to pay controlled by use of a “fluctuating work week” program should see an attorney whose practice is focused on FLSA compliance, also known as “wage and hour”. Because of the high risk associated with using such a scheme of payment, you can bet that companies using a fluctuating work week method of payment at one time received legal counseling about starting such a program. However, having run the employment litigation department of a Fortune 500 Denver, Colorado, company for several years before returning to a strictly plaintiffs’ FLSA practice, I can tell you that in the corporate world, programs that get started under one policy frequently morph over time in the field. And they morph without the company’s legal department ever learning about the changes until a lawsuit is filed.

For example, under fluctuating work week programs, there must be not only an explicit understanding about how the pay will be calculated, but the salary paid must never amount to less than the applicable minimum wage, and requisite statutory premium payments for overtime must always be paid for every qualified hour. Given the variability of hours frequently seen in “fluctuating work week” payroll schemes, after the passage of time, these requirements are frequently ignored.

The bottom line is this: Even in companies the supposedly want try to follow the law, the proper application of fluctuating work week rules is complex. In the real world, fluctuating work week pay schemes, in practice, are often both unfair and illegal under the FLSA. So anyone and everyone subject to such a scheme should get a legal opinion as to whether they are being paid in accordance with the law.

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