Federal appellate court gives employers a win in overtime dispute

The federal appellate court that makes law for federal cases in Connecticut has sided with an employer in an overtime dispute. The decision is good news for employers and provides greater flexibility and forgiveness with respect to calculating overtime for employees.

Fluctuating workweek method for overtime

The Fair Labor Standards Act (FLSA) requires employers to pay certain employees overtime if they work more than 40 hours per week. Generally speaking, employees are entitled to time and a half for overtime hours. But the FLSA allows employers leeway in determining how to calculate time and a half, at least in certain circumstances. One method is called the fluctuating workweek (FWW) method.

The FWW method applies to employees who receive a fixed weekly salary regardless of how many hours they work and whose employers tell them they will receive a fixed salary regardless of how much they work. Employers have to make sure the salary is still enough to cover the minimum wage on the weeks the employees work the most.

If the conditions are met, employers can use the FWW method, which allows them to calculate overtime by: