Positive Developments for New York Employers on the Use of the Fluctuating Workweek Method of Computing Overtime Compensation
June 24, 2020
On June 8, the U.S. Department of Labor issued its final rule to provide some clarity for employers seeking to use the fluctuating workweek method of computing overtime compensation under the Fair Labor Standards Act. The final rule, which is essentially the same as the proposed rule that was issued on November 5, 2019, lists each of the five requirements for using the fluctuating workweek method separately and explicitly states that bonuses, premium payments, and other additional payments of any kind are compatible with the use of the fluctuating workweek method. The final rule becomes effective on August 7.
About one week after the USDOL's fluctuating workweek rule was issued, the Second Circuit Court of Appeals (the Federal appellate court with jurisdiction over employers in New York) issued a decision in the case of Thomas et al. v. Bed Bath & Beyond Inc. In the Bed Bath & Beyond case, the Second Circuit affirmed the dismissal of a collective action filed by a group of Department Managers who alleged that Bed Bath & Beyond had improperly used the fluctuating workweek method to pay them overtime.