Retailers Cannot Use the Fluctuating Workweek Model to Calculate Overtime in Connecticut
In Williams v. General Nutrition Centers, Inc., 2017 Conn Lexis 241, (2017), the Connecticut Supreme Court confirmed the fluctuating workweek pay method could apply in cases not involving retail employees, but it would no longer be allowed in Connecticut when it came to retail workers.
The plaintiffs were managers at GNC stores in Connecticut. They were paid a base weekly salary, plus commissions on sales of certain premium merchandise, and they received overtime pay whenever they worked more than forty hours in a week. Their base salaries were fixed, but their commission payments fluctuated week to week based on their sales. GNC calculated their overtime using the fluctuating workweek method which is allowed under federal law. Because these employees do not have a consistent hourly rate of pay, their regular rate is calculated each week by dividing their total weekly pay by the number of hours they worked during the week. This formula yields their regular rate for that week, which is then used to determine their overtime pay.
The plaintiffs argued the fluctuating workweek method violated a Connecticut Department of Labor wage order governing the calculation of overtime pay for mercantile (or retail) employees. The wage order required that mercantile employees be compensated at a rate of one and one half times their regular rate of pay for all overtime hours worked in a week and that overtime pay be based on the employee’s regular hourly rate of pay. For employees who earn commissions, the wage order provides a formula for determining their regular hourly rate each week to be used in calculating overtime.
The Court held as a general rule Connecticut’s wage laws do not preclude use of the fluctuating workweek method, however, the plain meaning of the text in the wage order does preclude use of the fluctuating work week for mercantile employees. Therefore, the fluctuating workweek method is no longer allowed for retail employees.
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