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Lindsay M. Massillon, left, and Elizabeth Pryor Johnson, right, of Fowler White Burnett. Lindsay M. Massillon, left, and Elizabeth Pryor Johnson, right, of Fowler White Burnett.

On May 20, the Department of Labor (DOL) announced its final rule on the fluctuating workweek (FWW) method of calculating overtime pay for nonexempt employees. The final rule, effective 60 days from the date of publication, provides much-needed clarification on this method of compensation that has confounded many employers and resulted in different interpretations by the courts. Significantly, the final rule expressly permits employers to pay bonuses and incentive compensation (premiums for working nights or productivity pay) to employees who are paid using the FWW method. Courts have disagreed as to whether such additional payments destroy the “fixed salary” requirement of the FWW method, exposing employers to additional liability for overtime violations under the Fair Labor Standards Act (FLSA). The final rule addresses the confusion created by the former 2011 final rule that did not adopt certain proposed language related to the payment of bonuses under the FWW method.

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