Overtime isn't always as simple as multiplying your hourly rate by one and a half. For some salaried, nonexempt employees, the Fair Labor Standards Act (FLSA) fluctuating workweek uses a different formula that changes from week to week based on the number of hours worked. That doesn't mean employees lose their right to overtime, but it does mean the calculation can be confusing. Before you assume your pay is correct or incorrect, it helps to understand how this method is supposed to work.

Key Takeaways

• The FLSA fluctuating workweek applies to certain nonexempt salaried employees whose hours change from week to week.
• A fixed weekly salary does not remove overtime rights, but it changes how overtime is calculated.
• Ohio employers generally follow federal FLSA rules, meaning the fluctuating workweek method is allowed only when strict legal requirements are met.

What Is the FLSA Fluctuating Workweek?

The FLSA fluctuating workweek is a pay method used when an employee receives a fixed weekly salary, even though the number of hours worked changes from week to week. Instead of paying a different amount each week, the employer keeps the salary consistent and adjusts overtime pay based on the actual hours worked over 40 in a given week.

This does not eliminate overtime. Employees covered under this arrangement are still entitled to overtime pay when they work more than 40 hours, but the calculation works differently from the standard time-and-a-half model most people expect.

It is also important to separate exempt and nonexempt employees. Exempt employees are not entitled to overtime under the FLSA, while nonexempt employees are. The fluctuating workweek method only applies to certain nonexempt salaried employees.

In Ohio, employers generally follow federal overtime rules under the FLSA, which means this method is recognized but only allowed when strict legal requirements are met.

When Can an Employer Use the Fluctuating Workweek Method?

While using the fluctuating workweek method may sound attractive to employers, it isn’t available to everyone. The employee must genuinely work varying hours from week to week. This variation must be a natural part of the position and not manufactured by the employer.

Additionally, the employee must be paid a fixed base salary. They will receive this amount every pay period, even if they work fewer hours. That minimum base salary must pass the minimum wage test. Meaning, the base salary must meet or be above the minimum wage for the hours worked.

The employer and employee must have a mutual agreement on the pay structure. There needs to be a clear and mutual understanding that the pay agreed to is for all hours worked. That overtime pay is an additional half rate of the calculated regular rate for that week.

How to Calculate Overtime During a Fluctuating Workweek

To calculate your pay using the fluctuating workweek method, you need to determine your weekly salary. This is a set number that doesn’t change from week to week. Next, use the weekly salary and total hours worked to calculate the regular pay rate. Despite the name, this number will change from week to week based on the number of hours worked. Divide the weekly salary by the number of hours worked. The more hours worked, the lower the hourly regular rate will be.

The final step is to calculate the overtime premium. Overtime is half of that week’s regular pay rate. This rate is paid for every hour worked over 40 hours. Multiply the calculated regular pay rate by .5, then multiply the resulting number by the number of overtime hours.

This final number is added to the original weekly salary amount for the total pay for that period.

Fluctuating Workweek Method Calculation Example

• Weekly salary: $800
• Hours worked: 50
• Regular rate:
  • $800 ÷ 50 = $16/hour
• Overtime:
  • 10 overtime hours
  • $16 × 0.5 = $8
  • $8 × 10 = $80 overtime premium
• Total weekly pay:
  • $880

Note that the regular rate would be different if the employee worked a different number of hours the following week.

Can Ohio Employers Use the Fluctuating Workweek Method?

Yes, an employer could legally use the fluctuating workweek method. Ohio generally follows the FLSA standards for calculating overtime pay. However, an employer that chooses to use this method must comply with federal and Ohio state wage laws. Employers that fail to do so could face severe federal and state penalties. They could also face wage and hour claims from employees who were not properly compensated for their time worked.

Common Misunderstandings About the Fluctuating Workweek

It’s common for employees to become confused when looking at their paychecks. The standard belief is that all overtime is paid 1.5 times the regular hourly rate. However, this isn't always true. Additionally, a fluctuating workweek pay schedule is not the same as an exempt employee pay structure.

Employers cannot arbitrarily decide which pay structure they want to use. They must meet the legal requirements to qualify using a fluctuating workweek approach for employees. Even if they do qualify, an employee may still be entitled to overtime pay.

Speak With an Ohio Employment Attorney

The fluctuating workweek method can make overtime calculations more complicated than many employees realize. A fixed salary does not automatically eliminate the right to overtime, and employers must follow strict legal standards when using this pay structure. Knowing how the FLSA fluctuating workweek works can help you better understand your paycheck and recognize when something may not be calculated correctly.

Lalak LLC represents clients throughout Ohio in employment law matters involving overtime pay, wage disputes, and FLSA compliance. Whether you are questioning your own overtime calculations or trying to ensure your business is following the law, their attorneys can provide practical guidance based on Ohio and federal wage laws. Reach out to Lalak LLC today for experienced assistance with overtime and wage-related issues.