Nevada: Employers May Use Fluctuating Workweek to Compensate Certain Employees

compliance

The Nevada Labor Commission recently issued an Advisory Opinion regarding the fluctuating workweek (“FWW”) method of pay. The Opinion states that employers can use FWW to pay overtime hours worked in excess of 40 hours per week by a non-exempt employee who is paid a fixed-salary for all hours worked.

What is the fluctuating workweek method? FWW is a method of compensation in which an employee’s fixed salary is considered straight-time compensation for all hours worked in one workweek. Employers also pay an additional one-half of the regular rate of pay for any overtime hours worked during that workweek. The regular rate is determined by dividing the number of hours worked that week into the weekly portion of the base salary.

The Advisory Opinion confirms that employers may use the above method of calculation, as approved by federal regulations, to pay applicable Nevada employees. Since Nevada’s current overtime statute does not conflict with federal regulations, the Labor Commissioner stated that the FWW method may be used, even for fixed-salary employees with paid commissions and bonuses. In that case, the amount of the commission/bonus must be included in the weekly amount of pay when determining the regular wage rate.