Fixed Salaries, Fluctuating Hours, and Beyond: A Federal Court Addresses Common Questions About the Fluctuating Work Week Method of Compensation

Seyfarth Synopsis: A recent decision by the Southern District of New York clarifies common questions arising from the use of the fixed salary for a fluctuating workweek method of compensation (the “FWW”): (1) Do isolated pay deductions undermine the fixed salary requirement; (2) Must the employee’s hours fluctuate above and below 40 hours; and (3) Do employees have to subjectively understand the overtime pay calculations for there to be a mutual understanding that the fixed salary was intended to cover all hours worked at straight time? Spoiler Alert: This court answered no to each of these questions.

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