No Fluctuating Workweek for Retail Employees Paid by Commission, Connecticut Supreme Court Rules
Author: Michael Cardman, XpertHR Legal Editor
August 29, 2017
Employers in Connecticut may not use the "fluctuating workweek" method of calculating overtime for retail employees who are paid a commission as part of their earnings, for delivery drivers or for sales merchandisers.
Connecticut's wage and hour laws are silent about how to calculate overtime for most employees. As a result, there is nothing to prevent an employer from using the fluctuating workweek method for most employees as long as certain conditions are met, the Connecticut Supreme Court ruled in Williams v. General Nutrition Ctrs., Inc.
However, a state regulation specifies that a retail employer must determine commissioned employees' regular rate of pay by dividing their weekly pay by the hours they usually, rather than actually, work in a week. Similarly, the state statute specifies that delivery drivers' and sales merchandisers' regular rate of pay must be determined by dividing the total weekly pay by 40. As a result, the court ruled that the fluctuating workweek method may not be used for these types of employees because it requires consideration of the hours they actually work.
The fluctuating workweek method of calculating overtime can help an employer limit overtime costs. It permits an employer to pay an employee whose hours fluctuate from week to week a fixed amount per week as straight time, regardless of the number of hours worked. Under the fluctuating workweek, payment for overtime hours is just one-half times the regular rate, instead of one and one-half times the rate because the straight time rate is understood to compensate employees for all hours actually worked.