The Illinois Attorney General’s Office is currently pushing back against a change at the U.S. Department of Labor that would allow employers to change the way they calculate overtime pay. The proposed law amends a rule regulating the fluctuating work week method of computing overtime pay. The office along with 18 other attorneys general argue that the change would compromise worker safety, reduce due compensation, and make it difficult for employers to comply will fail labor law and practice.
Under the fluctuating workweek rule, employers can agree to pay a limited class of employees whose hours fluctuate from week to week a fixed salary for all hours worked. Those employees’ regular rate of pay is calculated by dividing the employee’s fixed salary by their total hours worked. Employers must then pay those employees an additional half of their regular rate for each overtime hour worked. The rule has been incompatible in which employees receive additional pay like bonuses and shift differentials linked to the hours they worked. The fluctuating workweek rule is the only rule under which workers’ hourly and overtime rates of pay actually decrease as the amount of hours they work per week increase. For that reason, states such as Illinois use a modified fluctuating workweek method or apply it only in the narrow set of circumstances allowed under current law. The new Department of Labor law would expand the application of the rule to employees who receive any kind of additional pay including pay incentives like overtime. The overtime rule has been a part of fair labor standards since 1938.