Mass-Peculiarities: An Employers Guide to Wage & Hour Law in the Bay State 2022 Edition

© 2022 Seyfarth Shaw LLP Massachusetts Wage & Hour Peculiarities, 2022 ed. | 77 In one week, he works 45 hours. To calculate the employee’s regular rate, the semi-monthly pay must be multiplied by 24 to find the employee’s annual salary ($1,600 x 24 = $38,400). That annual salary must then be divided by 52, the number of weeks in a year ($38,400 ÷ 52 = $738.46). The employee’s regular rate is that weekly salary divided by the number of hours in a regular workweek ($738.46 ÷ 35 = $21.09 per hour). The employee would be entitled to an additional $263.60 – $105.45 of additional straight-time compensation ($21.09 x 5 hours), plus an additional $158.15 for the employee’s overtime hours (1.5 x $21.09 x 5 hours). Example 2: An employee is paid on a monthly basis and receives $2,080 each month. The employee’s regular workweek is 40 hours. In one week, the employee works 45 hours. To calculate the regular rate, the semi-monthly pay must be multiplied by 12 to find the employee’s annual salary ($2,080 x 12 = $24,960). That annual salary must then be divided by 52 ($24,960 ÷ 52 = $480.00). The employee’s regular rate is that weekly salary divided by the number of hours worked in a regular week ($480.00 ÷ 40 = $12.00 per hour). The employee would be entitled to $90.00 of overtime (1.5 x $12.00 x 5 hours). 9. Calculation of the Regular Rate Using the Fluctuating Workweek Method (FWW) Under both Massachusetts and federal law, employers may pay a non-exempt employee a fixed salary intended to cover all hours worked each workweek where the employee’s number of hours worked each week varies (fluctuates), regardless of the number of hours the employee actually works, provided that the following conditions are satisfied : 424 • The employer and employee have a “clear and mutual understanding,” preferably in writing, that the employee will receive a fixed amount regardless of how many hours the employee actually works in a workweek (this includes both weeks in which the employee works more than forty hours per week and weeks in which the employee works less than forty hours per week). • The hours that an employee works per week must fluctuate. • The employee must be paid an additional one-half of his or her regular hourly rate for all hours worked over forty (this takes into account the fact that the employee has already been compensated for all hours worked at straight-time). 424 29 C.F.R. § 778.114. While no Massachuset t s statute or regulat ion direct ly addresses this method of calculat ing overt ime, both the SJC and the First Circuit have recognized that the fluctuat ingworkweek method is permissible under Massachuset t s law. See Valerio v. Putnam Assocs., Inc. , 173 F.3d 35, 39-40 (1st Cir. 1999); Goodrow v. Lane Bryant, Inc. , 432 Mass. 165, 177 (2000).