Fluctuating workweek payroll processing is an area that some of us might be familiar with.  This is a formula that I have not used in the past for payroll processing.  “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 such fixed amount as straight time pay for whatever hours he is called upon to work in a workweek, whether few or many.” (Cornell Law School) What does this mean for employees?  “Since the salary in such a situation is intended to compensate the employee at straight time rates for whatever hours are worked in the workweek, the regular rate of the employee will vary from week to week and is determined by dividing the number of hours worked in the workweek into the amount of the salary to obtain the applicable hourly rate for the week. Payment for overtime hours at one-half such rate in addition to the salary satisfies the overtime pay requirement because such hours have already been compensated at the straight time regular rate, under the salary arrangement.” (Cornell Law School)

Fluctuating Workweek Method Additional Information:

  1. “Under this method, employees who are entitled to overtime pay receive a fixed weekly salary, which is divided by the actual number of hours an employee worked in the week to determine the week’s base hourly rate. The employees will then receive an additional 0.5 times their base rate for each hour worked beyond 40 in the workweek.”
  2. “First, the employees’ hours actually have to fluctuate on a week-to-week basis, and employees must receive the fixed salary even when they work less than their regularly scheduled hours.
  3. Second, there must be a clear mutual understanding between the business and employees about how workers are paid.” (SHRM)
  4. “Currently, Alaska, California, New Mexico and Pennsylvania do not permit its use.” (SHRM)
  5. This option will not work for every position, generally organizations implement this formula for higher compensated individuals that are still eligible for overtime.
  6. “The application of the principles above stated 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 total weekly hours of work 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, except for overtime premiums, for whatever hours are worked in the workweek.
  7. The “fluctuating workweek” method of overtime payment may not be used unless the salary is sufficiently large to assure that no workweek will be worked in which the employee’s average hourly earnings from the salary fall below the minimum hourly wage rate applicable under the Act, and unless the employee clearly understands that the salary covers whatever hours the job may demand in a particular workweek and the employer pays the salary even though the workweek is one in which a full schedule of hours is not worked.” (Cornell Law School)

Additional Information:

29 CFR § 778.114 – Fixed salary for fluctuating hours.

SHRM Article: Should Employers Use the Fluctuating Workweek Method?

Prior to implementing the fluctuating workweek method of payment, research and understand the rules and regulations within the FLSA, state and local legislation.  We should also review current jobs and descriptions to fully understand which positions will consistently work for this formula driven payroll calculation.  Review with your payroll provider and ask questions, to ensure they can accurately and efficiently process the change.  It is rare a process to use, but can be an effective pay option for organizations to implement and use.

New York State Salary History and Equal Pay Law Change:

“One of the two bills signed by the Governor yesterday prohibits employer wage or salary history inquiries.  The purpose of the law is “to prevent further wage discrimination by prohibiting employers from asking for wage or salary history as a requirement for a job interview, job application, job offer, or promotion.”  Employers are now prohibited from seeking, requesting, or requiring, orally or in writing, “the wage or salary history from an applicant or current employee as a condition to be interviewed, or as a condition of continuing to be considered for an offer of employment, or as a condition of employment or promotion.”  Employers are further prohibited from asking the applicant’s previous or current employer about the applicant’s wage or salary history…. Notably, the law does not prohibit an applicant from voluntarily disclosing his/her wage or salary history for the purpose of negotiating wages or salary.  If the applicant voluntarily discloses his/her wage or salary history in response to an offer of employment, the employer may then confirm such history with the applicant’s previous employer…The second bill signed into law yesterday morning amends the Labor Law, which previously only prohibited wage differentials based on sex, to allow individuals to bring wage differential claims based on any protected class status under the Human Rights Law.” (emphasis added)…While these laws do not go into effect for several months (Salary History Bill – 180 days; Equal Pay Bill – 90 days), employers should take this opportunity to:  review job applications to ensure there are no questions pertaining to wage or salary history; notify supervisors, managers, and human resources representatives who may conduct job interviews of these changes; and consider reviewing pay practices to ensure compliance under the law.” (Bond Schoneck & King)

New York Sexual Harassment Law Update

“Among those provisions was a prohibition on including in any written contract a clause requiring the submission of sexual harassment claims to arbitration, except where inconsistent with federal law.  On June 26, 2019, the U.S. District Court for the Southern District of New York held, in Latif v. Morgan Stanley & Co. LLC, that this New York law prohibiting mandatory arbitration of sexual harassment claims is inconsistent with the Federal Arbitration Act (“FAA”) and is therefore invalid.”[i]

Federal law preempts the state law in this situation.  This is a change to the sexual harassment law throughout the state and in New York City.  Monitor for any appeals in federal court.

New York outlaw’s discrimination based on hairstyles, textures associated with race

“New York has outlawed discrimination based on natural hair and hairstyles associated with race like braids, twists and dreadlocks.

The new law effectively prevents employers and schools from requiring workers or students to straighten their hair or setting a dress code that prevents braids, dreadlocks or similar hairstyles “historically associated with race.”

Gov. Andrew Cuomo, who signed the legislation into law Friday, described it as an important step in correcting past failures to protect against all forms of discrimination.

What’s the new law?

The new law expands the legal definition of race to include “ancestry, color, ethnic group identification and ethnic background,” including any “traits historically associated with race” such as “hair texture and protective hairstyles.”

Examples of “protective hairstyles” are braids, locks and twists, among others, according to the law.

The same definition would also be added to the state Dignity For All Students act, which

New York is the second state to outlaw the hair-based discrimination, joining California that enacted a law earlier this month. New York City’s Commission on Human Rights has also issued similar anti-discrimination guidelines.”[ii]

[i] https://www.bsk.com/new-york-labor-and-employment-law-report/federal-court-holds-that-new-york-law-prohibiting-mandatory-arbitration-of-sexual-harassment-claims-is-invalid

[ii] https://www.lohud.com/story/news/politics/2019/07/15/ny-outlaws-racial-discrimination-based-hairstyles-like-dreadlocks/1717445001/

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