Final Rule on Overtime Compensation Changes ‘Fluctuating Workweek’ Calculations for Employers

On May 20, 2020, the U.S. Department of Labor unveiled a final rule that updates the “fluctuating workweek” method of calculating overtime compensation under the Fair Labor Standards Act. The final rule allows employers to include incentive-based payments such as bonuses, premium payments and other additional pay of any kind. The DOL believes this rule will allow employers and employees to better utilize flexible work schedules, especially as workers return to work following the COVID-19 pandemic.

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