Labor Department Proposal Would Permit Employers to Do End-Run Around Overtime Pay

Washington, DC—The Trump Department of Labor today proposed yet another rule to allow corporations to overwork their employees and not pay time-and-a-half for overtime, by expanding employer use of a rule that allows an employer to pay only one-half time for overtime hours worked. The following is a statement from Christine Owens, executive director of the National Employment Law Project:

“When employers require overtime hours, with few exceptions, workers must be paid time-and-a-half. Today, the Trump Department of Labor took the first step in widening the use of a method that allows corporations to evade the need to pay time-and-a-half, and instead merely pay half-time for hours worked over 40. It is yet another gift to corporate America and the latest in the administration’s plan to eviscerate overtime pay with the proverbial death by a thousand cuts.

“The ‘fluctuating workweek’ (FWW) rule permits companies to pay a fixed weekly rate for fluctuating hours, and just half-time for any overtime hours. The FWW calculation, where permitted, can reduce a plaintiff’s overtime pay by approximately two-thirds, and today the Labor Department makes it even easier for employers to pay a lower amount. The Department today says that employers can use that method when they pay bonuses and commissions and other payments so long as they include them in an employee’s regular rate of pay.

“The fundamental assumption underpinning the FWW is that it is fair to use it to calculate overtime pay because the employee has a fixed salary for the fluctuating weeks. But where employers use this method when they pay bonuses or premium pay, it will increase the number of employers who are not paying one-and-a-half times the regular rate for overtime hours worked. It gives employers yet another way to lower their overtime pay liability.

“This constitutes the second of a one-two punch on overtime, coming on the heels of the Trump Labor Department’s overtime rollback for ‘white collar’ employees, issued just weeks ago. At a time when workers are working more and earning less, the Trump Administration just gave corporations another gift.”

###