C.F.R. » Title 29 » CHAPTER V—WAGE AND HOUR DIVISION, DEPARTMENT OF LABOR › SUBCHAPTER B—STATEMENTS OF GENERAL POLICY OR INTERPRETATION NOT DIRECTLY RELATED TO REGULATIONS › PART 778—OVERTIME COMPENSATION › Subpart B—The Overtime Pay Requirements

29 C.F.R. § 778.114

Fluctuating Workweek Method of Computing Overtime

Read at: eCFRecfr.gov CornellLII GovInfogovinfo.gov CasesGoogle Scholar

(a) An employer may use the fluctuating workweek method to properly compute overtime compensation based on the regular rate for a nonexempt employee under the following circumstances:

(1) The employee works hours that fluctuate from week to week;

(2) The employee receives a fixed salary that does not vary with the number of hours worked in the workweek, whether few or many;

(3) The amount of the employee's fixed salary is sufficient to provide compensation to the employee at a rate not less than the applicable minimum wage rate for every hour worked in those workweeks in which the number of hours the employee works is greatest;

(4) The employee and the employer have a clear and mutual understanding that the fixed salary is compensation (apart from overtime premiums and any bonuses, premium payments, commissions, hazard pay, or other additional pay of any kind not excludable from the regular rate under section 7(e)(l) through (8) of the Act) for the total hours worked each workweek regardless of the number of hours, although the clear and mutual understanding does not need to extend to the specific method used to calculate overtime pay; and

(5) The employee receives overtime compensation, in addition to such fixed salary and any bonuses, premium payments, commissions, hazard pay, and additional pay of any kind, for all overtime hours worked at a rate of not less than one-half the employee's regular rate of pay for that workweek. Since the salary is fixed, the regular rate of the employee will vary from week to week and is determined by dividing the amount of the salary and any non-excludable additional pay received each workweek by the number of hours worked in the workweek. Payment for overtime hours at not less than one-half such rate satisfies the overtime pay requirement because such hours have already been compensated at the straight time rate by payment of the fixed salary and non-excludable additional pay. Payment of any bonuses, premium payments, commissions, hazard pay, and additional pay of any kind is compatible with the fluctuating workweek method of overtime payment, and such payments must be included in the calculation of the regular rate unless excludable under section 7(e)(1) through (8) of the Act.

(b) The application of the principles stated above may be illustrated by the case of an employee whose hours of work do not customarily follow a regular schedule but vary from week to week, whose work hours never exceed 50 hours in a workweek, and whose salary of $600 a week is paid with the understanding that it constitutes the employee's compensation (apart from overtime premiums and any bonuses, premium payments, commissions, hazard pay, or other additional pay of any kind not excludable from the regular rate under section 7(e)(1) through (8)) for all hours worked in the workweek.

(1) Example. If during the course of 4 weeks this employee receives no additional compensation and works 37.5, 44, 50, and 48 hours, the regular rate of pay in each of these weeks is $16, $13.64, $12, and $12.50, respectively. Since the employee has already received straight time compensation for all hours worked in these weeks, only additional half-time pay is due for overtime hours. For the first week the employee is owed $600 (fixed salary of $600, with no overtime hours); for the second week $627.28 (fixed salary of $600, and 4 hours of overtime pay at one-half times the regular rate of $13.64 for a total overtime payment of $27.28); for the third week $660 (fixed salary of $600, and 10 hours of overtime pay at one-half times the regular rate of $12 for a total overtime payment of $60); for the fourth week $650 (fixed salary of $600, and 8 overtime hours at one-half times the regular rate of $12.50 for a total overtime payment of $50).

(2) Example. If during the course of 2 weeks this employee works 37.5 and 48 hours and 4 of the hours the employee worked each week were nightshift hours compensated at a premium rate of an extra $5 per hour, the employee's total straight time earnings would be $620 (fixed salary of $600 plus $20 of premium pay for the 4 nightshift hours). In this case, the regular rate of pay in each of these weeks is $16.53 and $12.92, respectively, and the employee's total compensation would be calculated as follows: For the 37.5 hour week the employee is owed $620 (fixed salary of $600 plus $20 of non-overtime premium pay, with no overtime hours); and for the 48 hour week $671.68 (fixed salary of $600 plus $20 of non-overtime premium pay, and 8 hours of overtime at one-half times the regular rate of $12.92 for a total overtime payment of $51.68). This principle applies in the same manner regardless of the reason for the hourly premium rate (e.g., weekend hours).

(3) Example. If during the course of 2 weeks this employee works 37.5 and 48 hours and the employee received a $100 productivity bonus each week, the employee's total straight time earnings would be $700 (fixed salary of $600 plus $100 productivity bonus). In this case, the regular rate of pay in each of these weeks is $18.67 and $14.58, respectively, and the employee's total compensation would be calculated as follows: For the 37.5 hour week the employee is owed $700 (fixed salary of $600 plus $100 productivity bonus, with no overtime hours); and for the 48 hour week $758.32 (fixed salary of $600 plus $100 productivity bonus, and 8 hours of overtime at one-half times the regular rate of $14.58 for a total overtime payment of $58.32).

(c) Typically, such fixed salaries are paid to employees who do not customarily work a regular schedule of hours and are in amounts agreed on by the parties as adequate compensation for long workweeks as well as short ones, under the circumstances of the employment as a whole. Where the conditions for the use of the fluctuating workweek method of overtime payment are present, the Act, in requiring that “not less than” the prescribed premium of 50 percent for overtime hours worked be paid, does not prohibit paying more. On the other hand, where all the facts indicate that an employee is being paid for overtime hours at a rate no greater than that which the employee receives for nonovertime hours, compliance with the Act cannot be rested on any application of the fluctuating workweek overtime formula.

(d) The fixed salary described in paragraph (a) of this section does not vary with the number of hours worked in the workweek, whether few or many. However, employers using the fluctuating workweek method of overtime payment may take occasional disciplinary deductions from the employee's salary for willful absences or tardiness or for infractions of major work rules, provided that the deductions do not cut into the minimum wage or overtime pay required by the Act.

[85 FR 34992, June 8, 2020]
Notes of Decisions
Cited in 228 cases (34 in the last 5 years), 1967–2025 · leading case: Samson v. Apollo Resources, Inc., 242 F.3d 629 (5th Cir. 2001).
Sort: Relevance Newest Treatment
Samson v. Apollo Resources, Inc., 242 F.3d 629 (5th Cir. 2001). · cites it 14× “They complained that Apollo’s use of the FWW method, pursuant to 29 C.F.R. § 778.114 , was unlawful because the employees frequently worked more than sixty hours in a week without receiving an additional overtime premium.”
Desmond v. PNGI Charles Town Gaming, L.L.C., 630 F.3d 351 (4th Cir. 2011). · cites it 9× “The court based its decision not on 29 C.F.R. § 778.114 , but rather upon the logic of Overnight Motor and general principles of compensatory damages.”
Dacar v. Saybolt, L.P., 914 F.3d 917 (5th Cir. 2018). · cites it 9× “See 29 C.F.R. § 778.114 (a). Saybolt LP, a petroleum products company, used the FWW method to calculate overtime *921 compensation for some of its oil and gas inspectors who worked radically varying hours each week.”
Betty Black v. SettlePou, P.C., 732 F.3d 492 (5th Cir. 2013). · cites it 6× “This division has been focused on whether the FWW formula as expressed in 29 C.F.R. § 778.114 may be applied retroactively in misclassification cases.”
Hunter v. Sprint Corp., 453 F. Supp. 2d 44 (D.D.C. 2006). · cites it 9× “Calculating overtime pay due using the fluctuating workweek method Even if the Court were able to conclude that Price had worked only 600 hours of overtime (or fewer) during the applicable limitations period, Sprint still would not be entitled to summary judgment because Sprint…”
Mitchell v. Abercrombie & Fitch, Co., 428 F. Supp. 2d 725 (S.D. Ohio 2006). · cites it 14× “The regulation sets forth the fluctuating workweek method, and provides as follows: An employee employed on a salary basis may have hours of work which fluctuate from week to week and the salary may be paid him pursuant to an understanding with his employer that he will receive…”
Hector Hernandez v. Plastipak Packaging, Inc., 15 F.4th 1321 (11th Cir. 2021). · cites it 8× “paying Hector Hernandez bonuses—a shift premium for night work and holiday pay—on top of his fixed salary precludes the use of the fluctuating workweek method.”
Rainey v. Am. Forest & Paper Ass'n, Inc., 26 F. Supp. 2d 82 (D.D.C. 1998). · cites it 9× “56(c)); and it is further DECLARED: that no reasonable jury could find that there was a “clear mutual understanding of the parties that the fixed salary [wa]s compensation (apart from overtime premiums) for the hours worked each workweek, whatever their number,” 29 C.F.R. §…”
Reinaldo Ramon Lamonica v. Safe Hurricane Shutters, Inc., 711 F.3d 1299 (11th Cir. 2013). · cites it 4× “” After Missel was decided, the Department of Labor (“DOL”) promulgated 29 C.F.R. § 778.114 , an interpretive rule setting forth the fluctuating workweek method.”
Cash v. Conn Appliances, Inc., 2 F. Supp. 2d 884 (E.D. Tex. 1997). · cites it 15× “18 See 29 C.F.R. § 778.114 (a); Condo v. Sysco, Corp.”
Russell v. Wells Fargo & Co., 672 F. Supp. 2d 1008 (N.D. Cal. 2009). · cites it 8× “Department of Labor’s Interpretive Rules Clarifying Overnight Motor In 1968, the Department of Labor (DOL) promulgated 29 C.F.R. § 778.114 , an interpretive rule intended to codify the Supreme Court’s decision in Overnight Motor .”
Clark v. Shop24 Global, LLC, 77 F. Supp. 3d 660 (S.D. Ohio 2015). · cites it 9× “In the Plaintiffs view, 29 C.F.R. § 778.114 sets forth the conditions that must be satisfied .”
Show all 228 citing cases →
— 29 C.F.R. § 778.114(a) — 10 cases
Betty Black v. SettlePou, P.C., 732 F.3d 492 (5th Cir. 2013). “This division has been focused on whether the FWW formula as expressed in 29 C.F.R. § 778.114 may be applied retroactively in misclassification cases.”
Cowan v. Treetop Enter., Inc., 163 F. Supp. 2d 930 (M.D. Tenn. 2001).
Singer v. City of Waco, Texas, 324 F.3d 813 (5th Cir. 2003).
Dacar v. Saybolt, L.P., 914 F.3d 917 (5th Cir. 2018). “See 29 C.F.R. § 778.114 (a). Saybolt LP, a petroleum products company, used the FWW method to calculate overtime *921 compensation for some of its oil and gas inspectors who worked radically varying hours each week.”
Hector Hernandez v. Plastipak Packaging, Inc., 15 F.4th 1321 (11th Cir. 2021). “paying Hector Hernandez bonuses—a shift premium for night work and holiday pay—on top of his fixed salary precludes the use of the fluctuating workweek method.”
— 29 C.F.R. § 778.114(a)(1) — 1 case
Lee v. Mani & Pedi Inc. (S.D.N.Y. 2022).
— 29 C.F.R. § 778.114(c) — 2 cases
Stephen Allen, Jr. v. Entergy Louisiana, L., 866 F.3d 610 (5th Cir. 2017).
Hector Hernandez v. Plastipak Packaging, Inc. (11th Cir. 2023).
Annotations are extracted automatically from the opinions in the Syfert caselaw corpus and ranked by authority, recency, and treatment. Dots show Syfertize treatment of the citing case itself.