Frequently Asked Questions (and Answers) About
Fluctuating Work Week
The U.S. Department of Labor (DOL) is responsible for enforcing the Fair Labor Standards Act (FLSA) regulations that govern which employees may be considered as non-exempt (eligible for overtime pay) or exempt (not eligible for overtime pay). It is important that nonexempt employees on a fluctuating work week and their supervisors understand what is and is not work time and how overtime is calculated and paid for those positions.
FQ1: What is a fluctuating work week?
FA1: A fluctuating work week is a work schedule that can vary significantly above and below 40 hours per week. Often the fluctuation is caused by peaks or lows in workflow; there are periods of time when the employee may work only 35 hours a week, but during peak season may work 50 or 55 hours a week. Thus, the number of hours required to perform the work ‘fluctuates’ above and below the 40-hour level.
FQ2: How did the University decide what positions would be on a fluctuating work week basis?
FA2: In any University there are certain positions that have responsibilities that normally extend beyond regular business hours and with peak seasons and low seasons. Often these types of positions are in athletics, admissions, and sometimes financial aid. Averett reviewed positions, responsibilities, and workload to determine which positions did not meet the standards set by DOL to be exempt and then which ones experienced these fluctuating workflows. Those were selected to be fluctuating work week positions.
FQ3: Since fluctuating work week positions are not exempt, how are they different from other nonexempt positions, other than the work flow?
FA3: All nonexempt positions, including fluctuating work week positions must be paid overtime for hours in excess of forty hours a week. In reality, very few of the nonexempt positions at Averett will incur overtime hours; or if they do, most of them will not work more than a few hours over and, then, only one or two times a years. People on a fluctuating work week are known to have wide variations in their schedules which means, we know in advance there are times they will work many hours of overtime in order to achieve the outcomes for their positions and other times when they will work only 34 or 35 hours a week. Fluctuating work week positions must be paid on a salary basis whereas other nonexempt positions could be paid a flat hourly rate.
FQ4: So, if fluctuating work week positions are nonexempt, will they be paid overtime?
FA4: Yes, all nonexempt positions, including fluctuating work week positions must be paid overtime at the rate of one-and-a-half times the hourly rate for that week. For fluctuating work week positions, the formula for calculating the hourly rate is the person’s weekly salary rate divided by the total number of hours worked during the Sunday – Saturday work week. That rate is then multiplied by 50% to get the overtime rate for that week. The base salary for fluctuating work week employees is intended to cover all hours worked, as it is for exempt employees. The difference is that nonexempt fluctuating work week employees received the extra half-time for their overtime whereas exempt employees do not.
FQ5: I’m not sure I follow that calculation method, can you give me an example?
FA5: Sure. Let’s say that Chris is in a fluctuating work week position and is paid a salary of $405 a week. Over the course of four weeks (2 pay periods), Chris worked the following number of hours:
Week 1: Chris was in the office processing applications – 34 hours
Week 2: Chris was traveling to schools and recruiting students – 53 hours
Week 3: Chris was traveling to schools to recruit students & attended a 2- day conference on ‘Technology in Student Recruitment’ – 48 hours
Week 4: Chris is back at the office completing files and following up – 37 hours
During week 1, Chris’ hourly rate of pay is calculated: $405 / 34 hours = $11.91 per hour. No overtime is due since Chris worked fewer than 40 hours in the week. Chris will be paid $405 for the week.
During week 2, Chris’ hourly rate of pay is calculated: $405 / 53 hours = $7.64 per hour. Because Chris worked in excess of 40 hours, Chris is entitled to overtime pay this week. Overtime is calculated at a rate of 50% of the hourly rate, or $7.64 x 50% = $3.82 per hour. Chris worked 13 hours of overtime at that rate for a total additional overtime due of $49.66. Chris will be paid $454.66 for the week.
At the end of the first pay period, Chris has earned $859.66 before taxes and other deductions.
During week 3, Chris’ hourly rate of pay is calculated: $405 / 48 hours = $8.43 per hour. Because Chris worked in excess of 40 hours, Chris is entitled to overtime pay this week. Overtime is calculated at a rate of 50% of the hourly rate, or $8.43 x 50% = $4.215 per hour. Chris worked 8 hours of overtime at that rate for a total overtime due of $33.72. Chris will be paid $438.72 for the week.
During week 4, Chris’ hourly rate of pay is calculated: $405 / 37 hours = $10.95 per hour. No overtime is due since Chris worked fewer than 40 hours in the week. Chris will be paid $405 for the week.
At the end of the second pay period, Chris has earned $843.72 before taxes and other deductions.
FQ6: Are there any other differences between fluctuating work week positions and other nonexempt positions?
FA6: Not really. All benefits are the same, all holiday time and other paid leave time work the same way. Time reporting is the same. All the same policies apply. No changes are being made to position duties or expectations as a result of this designation.
FQ7: Why not designate all nonexempt positions as fluctuating work week positions then?
FA7: Averett cannot do that and still comply with the law. The requirement is that we must have a basis to believe that the position will have work hours that vary on a weekly basis and that those weekly hours worked will vary from something below 40 hours to something above 40 hours. Most nonexempt positions are going to have very little overtime and therefore will not meet the variation requirement of the rule.
