HARTFORD, Conn. (Legal Newsline) – Although the Connecticut Supreme Court has stated in a recent opinion that the fluctuating workweek method cannot be used for retail employees, one attorney says the outcome of the case may not be as significant as some may think.
In Williams v. General Nutrition Centers Inc., the Connecticut Supreme Court on Aug. 17 narrowed in on who is allowed to use the fluctuating workweek method. The Supreme Court specified that employers who were prohibited from using this method were those specifically in the "mercantile trade."
State law requires employers to pay certain employees one-and-one-half times their regular pay for overtime hours.
While calculating overtime pay for employees paid a fixed hourly wage is simple, calculating overtime for employees paid in whole or in part by commission isn't.
"(T)heir average hourly rate will tend to fluctuate, leaving them without a readily apparent regular rate to use for calculating overtime pay," the court's opinion said.
"We therefore conclude that, for employees paid in whole or in part with commissions, the plain meaning of the wage order requires mercantile employers to determine an employee's regular hourly rate for the purpose of calculating overtime by dividing the employee's weekly pay by the hours the employee usually works in a week," the court stated.
Peter Goselin, an employment law attorney in Hartford, told Legal Newsline that while the fluctuating method is barred for retail workers, it will likely not have a major effect on the state.
"After this decision, an employer cannot use the fluctuating method (FWW) to calculate overtime for retail employees, restaurant and hotel employees, and delivery drivers or sales merchandisers," Goselin said.
"It does not appear that there are any other occupations in which FWW is barred by Connecticut regulations. So, really, I don't think this case is going to change much."
Goselin said that one of the biggest takeaways from the Williams v. GNC case is that the Supreme Court "has reminded us that wage orders and other state regulations still have clout in certain limited areas of the employment relationship."
"The one other thing to note is that nothing in the Williams v. GNC case affects the trend in the district courts in the Second Circuit to reject FWW as a method for calculating overtime damages in cases where non-exempt employees have been misclassified as exempt," Goselin said.
"It's a separate issue, but over the last 10 years there have been a number of district court decisions within the circuit making it clear that an employee's unpaid overtime where a misclassification is corrected is going to be one-and-one-half times the employee's regular rate (calculated for each workweek) times the number of overtime hours."