Many employers faced with large potential overtime costs elect to implement the fluctuating workweek pay plan for non-exempt workers. Under Department of Labor regulations, employers can pay a guaranteed salary for all hours worked by the employee. Instead of paying time and one-half the hourly rate for time worked in excess of 40 hours a week, the employer pays a half-time overtime premium that is determined by dividing the salary by the total number of hours worked that week. This plan can reduce overtime obligations by two-thirds or more.
