Under the federal Fair Labor Standards Act, employers who agree with employees who work a fluctuating number of hours each week to pay them a base salary regardless of the number of hours worked, are then able to pay those employees half-time for their overtime hours. This somewhat unknown, and not often used, structure generally saves employers money and gives employees the certainty of the salary during weeks working less than 40 hours.
One drawback to the current law, according to some employers and employee, is that additional compensation, such as through bonuses or commissions, are not permitted for those utilizing the fluctuating work week/half time overtime option. The DOL has recognized the value of the option to employers and employees and has indicated that it will publish a proposed rule to “grant employers greater flexibility to provide additional forms of compensation to employees whose hours vary from week to week”. The proposed new rule is expected out soon.