Dive Brief:

• The Scotts Co. has agreed to pay nearly $3.1 million to settle state and federal wage and hour claims by lawn care workers in several states (Ervin et al v. The Scotts Company, LLC., No. 17-cv-60344 (S.D. Fla. July 27, 2020)).
• The plaintiffs, who provide lawn care services to Scotts' customers, alleged their employer misapplied the "fluctuating workweek" (FWW) method in paying them, violating the requirements of the Fair Labor Standards Act (FLSA) and Illinois, Kentucky, Michigan, Oregon and Washington laws, according to court documents. The workers further alleged they weren't paid time-and-one-half their regular rate of pay for overtime when they worked more than 40 hours in a workweek.
• A federal judge has been asked to approve the settlement and certify the settlement classes.

Dive Insight:

The FWW method allows employers to pay non-exempt employees with fluctuating hours a fixed salary for each weeks' work. When workers put in less than 40 hours, they're paid the fixed salary. When they put in more than 40 hours, necessitating overtime, employers determine their regular rate by "dividing the number of hours worked in the workweek into the amount of the salary."

Following a June ruling from the 2nd U.S. Circuit Court of Appeals on fluctuating workweeks and worker pay, attorneys for law firm Seyfarth Shaw noted in a blog post that employers should explain to FWW-paid workers in writing that their fixed salary is "intended to compensate them for all hours worked in any week and that their overtime premium rate will be at half the effective hourly rate of their salary that week based on their actual hours worked."

The Seyfarth Shaw attorneys also noted that in some states, such as Alaska, California, New Mexico, and Pennsylvania, the FWW method of pay is not allowed. 

Federal regulations regarding the fluctuating workweek were recently updated. The U.S. Department of Labor (DOL) clarified that bonuses, premium payments and "other additional pay of any kind" aren't incompatible with the law's fluctuating workweek arrangement but must be included when calculating overtime pay for those salaried, non-exempt employees whose hours vary from week to week.

DOL said the revised rule will allow employers and employees to better take advantage of flexible work schedules and make it easier for employers and employees to agree to unique scheduling arrangements while allowing employees to retain access to bonuses and premiums they would otherwise earn, especially as the nation grapples with the COVID-19 pandemic. "Some employers are likely to promote social distancing in the workplace by having their employees adopt variable work schedules, possibly staggering their start and end times for the day," DOL said. The revision takes effect Aug. 7.