BOSTON — A store manager in a General Nutrition Centers branch in Massachusetts, who sued the company for alleged violations of the Fair Labor Standards Act (FLSA) and Massachusetts wage and hour law, cannot move forward with his case according to the U.S. Court of Appeals for the First Circuit. The plaintiff alleged that GNC’s method of calculating overtime for managers violated his wage rights, but the court disagreed.
Fluctuating Workweek Method
According to the suit, GNC violated FLSA and state wage laws by using the fluctuating workweek method to calculate overtime for managers who earn variable weekly commissions. Under FLSA, an employer generally must pay hourly employees time and one half their regular hourly rate for hours worked beyond 40 in a workweek. GNC paid the plaintiff a fixed weekly salary that was the same no matter how many hours he worked. He was also eligible to receive a performance-based sales commission each week that varied depending on the amount of sales he made.
As to overtime, the plaintiff states he was paid an overtime premium for hours worked in excess of 40 each week using the fluctuating workweek method. Employers using the fluctuating workweek method for calculating overtime generally divide a fixed weekly salary by the actual number of hours worked in the week to determine the week’s base hourly rate, and overtime is paid by adding an additional half-time for each hour worked in excess of 40. GNC added the plaintiff’s fixed salary and the commissions he earned that week and divided the total by the actual number of hours he worked that week to arrive at a base rate. GNC then paid an additional 50 percent of the base rate for each hour exceeding 40 that the plaintiff worked that week.
Court of Appeals Ruling
According to the court, an employer like GNC may use the fluctuating workweek method to calculate overtime pay rates for employees who received a combination of a fixed weekly salary and variable performance-based commissions. Every other court in the country follows this approach, which distinguishes between hours-based and performance-based bonuses when determining whether an employee is paid an allowable “fixed salary” under the fluctuating workweek. The court stated that the fact that the plaintiff was given additional commissions as straight-time pay for whatever eligible sales he made does not detract at all from the fact that he was given his salary as straight-time pay for whatever hours he worked
Under FLSA, employers must ensure that they calculate minimum wage and overtime properly or face potential liability for back wages. You should call (855) 754-2795 or complete the Free Unpaid Overtime Case Review form on the top right of this page if you or a loved one suspects that your employer is denying you of your wage rights. Our top-rated team of wage lawyers will evaluate your situation to determine your best course of action. We will also determine if it is in your best interest to file a lawsuit against your employer. There are strict time limitations for filing, so it is important that you call our experienced attorneys today.