In Chevalier v. General Nutrition Centers, Inc., the Pennsylvania Supreme Court stated that employers may not use the fluctuating workweek (FWW) method of calculating overtime under state wage and hour law. The FWW allows employers to pay a fixed salary, regardless of the number of hours worked, and pay overtime at a half hourly rate for time worked over 40 hours in a week by dividing the fixed salary by the number of hours worked in a week. The idea is that employees already receive the first portion of the overtime rate in the fixed salary.

The Court stated that this method, although permitted under federal law, was not consisted with state wage and hour law, which requires that employees be paid for overtime “not less than one and one-half times” the employee’s regular rate. Employers must stop using the FWW method of calculating overtime and ensure that employees receive one and a half times the regular rate of pay for overtime hours worked.

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