Paul DeCamp, Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s Washington, DC office, was quoted in the Bloomberg Law Daily Labor Report, in “Fluctuating Overtime Rule Shields Employers from Litigation,” by Ben Penn.
Following is an excerpt:
The Labor Department has finalized a regulation to give employers more flexibility and legal clarity by allowing them to incorporate bonuses when using an alternate method to calculate overtime pay for workers with irregular schedules.
When it takes effect in 60 days, the final rule will give companies more protection from wage lawsuits. But there are concerns it could lead employers to abuse their newfound regulatory freedom by reducing salaries—an issue worker advocates have raised. The DOL framed the regulation, which revives a 2008 George W. Bush administration initiative that was quashed by the Obama administration, as a “final rule to expand American workers’ access to bonuses.”
The rule updates “fluctuating workweek” overtime calculations, an option available for employers under the Fair Labor Standards Act. The method allows businesses to pay certain workers whose hours vary widely each week at half their regular rate, instead of at one-and-a-half times, for any hours worked over 40 each week.
The rule states that bonuses, premium payments, hazard pay, and other incentives are compatible with the regular-rate calculation, rescinding language from the Obama-era rule intended to stop employers from reducing salaries by shifting large portions of compensation to other incentives. …
“Empirically, there’s really no evidence for the claim that employers are going to start slashing salaries and, in their place, instituting bonuses,” said Paul DeCamp, who ran the Wage and Hour Division during the George W. Bush administration. “Neither employees nor employers really care about the form of the compensation. The focus is on the total dollars.”