eleventHCirCuitAppliesteXtuAlAnAlysistofluCtuAtingworkweekmetHod labor & Employment law Section Chairs : AmandaBiondolino – SassLawFirm & LaKishaKinsey-Sallis – Fisher & PhillipsLLP
The question recently before the Eleventh Circuit in Hernandez v . Plastipak Packaging , Inc ., 15 F . 4th 1321 , 1322 ( 11th Cir . 2021 ), was whether paying a shift premium and holiday pay precluded an employer ’ s use of the fluctuating workweek method . The Eleventh Circuit concluded that it does not . This case was decided based on the regulation in effect prior to the 2020 amendment of Section 778.114 of the Code of Federal Regulations , which specifically recognized that such additional compensation does not invalidate the use of the fluctuating workweek method . However , the analysis in this published decision provides important insight for labor and employment litigators .
The question in Hernandez was the meaning of “ fixed salary .” 1 The employee was paid a fixed salary and his hours fluctuated . 2 He also was paid an overtime premium , a night-shift premium , and holiday pay . The employee sought summary judgment in the district court , arguing that he was not paid a “ fixed salary ” because his salary fluctuated from week to week with the addition of holiday
or shift differential pay . The district court granted summary judgment in the employee ’ s favor and entered judgment for the employee .
On appeal , the Eleventh Circuit reversed the judgment , holding that “[ s ] o long as an employee receives a fixed salary covering every hour worked in a week , the payment of a bonus on top of the employee ’ s fixed salary does not bar an employer ’ s use of the fluctuating workweek method to calculate overtime pay .” 3 Because the employee received a base salary that was fixed , it met the requirement under the fluctuating workweek method even if the employee received additional compensation , such as production bonuses or holiday pay . 4
In reaching this conclusion , the court reviewed the text of the Fair Labor Standards Act ( FLSA ) as well as the history of the fluctuating workweek method , which was first recognized in 1938 and permitted the payment of production
theanalysisinthis publisheddecision providesimportant insightforlabor andemployment litigators .
bonuses . 5 The Eleventh Circuit specifically noted that the fluctuating workweek method requires a fixed salary , not a fixed total compensation package . 6 It rejected the employee ’ s assertion that the shift premium and holiday pay were part of his fixed salary , holding that “ the salary is a subset of the employee ’ s compensation .” 7 It observed that the department ’ s regulations “ tell us that an employee ’ s ‘ fixed salary ,’ ‘ compensation ,’ and ‘ bonuses ’ are different things , so we should give them different meanings .” 8 Thus , the Court found the employee ’ s interpretation was not supported by the regulation ’ s text . As long as the employee received a fixed salary that does not fluctuate , even though his or her hours do , it complies with the requirements of the fluctuating workweek method .
The Court rejected the employee ’ s liberal construction of the FLSA , his reliance of 2011 DOL guidance , and his attempt to distinguish between production
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