11th Circuit permits bonuses under fluctuating workweek method

The U.S. 11th Circuit Court of Appeals (whose rulings apply to all Florida employers) recently clarified when it would be appropriate to use the “fluctuating workweek method” of payment under the Fair Labor Standards Act (FLSA). The fluctuating workweek method permits an employer to pay employees who are traditionally paid on an hourly basis a fixed weekly rate regardless of the number of hours they work, provided their work hours actually change on a week-to-week basis and the hourly rate doesn’t fall below the minimum wage. While employers must also still pay an overtime premium (at a rate of half the hourly rate for a particular pay period), the method mitigates some of the unexpected costs associated with positions that have large fluctuations in the number of hours worked by employees.

Facts

From March 2011 until May 2016, Hector Hernandez worked at a Plastipak Packaging facility in Plant City, Florida, first as a process technician and later as a maintenance technician. Both positions are nonexempt under the FLSA and ordinarily would require him to be paid at an hourly rate and receive overtime pay at a rate of one-and-one-half times his hourly rate for every hour he worked in excess of 40 in a given workweek.