Disclaimer: This article reflects information gathered from reputable sources including the U.S. Department of Labor, the UMC General Council on Finance and Administration (GCFA), and finance professionals. However, the content provided is for informational purposes only and should not be considered legal advice. For specific guidance on employment law or payroll management, please consult a qualified attorney or labor law expert.
The recent changes to FLSA laws have underscored the complexity of managing payroll for camp and retreat staff, especially when work hours vary significantly throughout the year. In June, UMCRM provided resources to help ministry organizations navigate these changes. Now, we want to highlight an additional option for compensating employees that could benefit your ministry: the Fluctuating Workweek (FWW) method of calculating overtime under the FLSA. This method may offer a flexible and cost-effective solution for camp and retreat organizations. In this blog post, we will explain how camp and retreat leaders can understand and implement the FWW method for their ministry.
What is the Fluctuating Workweek Method?
The Fluctuating Workweek method allows you to pay non-exempt employees (those who qualify for overtime) a fixed salary each week, regardless of the number of hours they work, with additional overtime pay based on a simple calculation when they work more than 40 hours in a week. This method is especially helpful in camp and retreat settings, where hours can be long and intense during the summer but drop off significantly during the off-season.
Key Points to Remember
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Fixed Weekly Salary: Employees receive a steady weekly salary that does not change even if their hours fluctuate from week to week.
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Overtime Calculation: If an employee works more than 40 hours in a week, they are paid extra, but at a half rate of their regular hourly wage for that week. The regular hourly wage is calculated by dividing their weekly salary by the total number of hours worked that week and thus will vary from week to week.
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Agreement with Employees: There must be a clear understanding between you and your employee that their salary covers all the hours they work each week, no matter how few or many.
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Variable Work Hours: This method is only for employees whose hours change week by week. If someone works the same hours every week, this approach is not an option.
Steps to Implement the Fluctuating Workweek Method in Your Camp or Retreat Ministry
Here’s a simplified breakdown to help camp and retreat ministry leaders implement the FWW method:
1. Identify Eligible Staff
Start by determining which of your team members are eligible for the FWW method. Non-exempt employees, like facilities directors, hospitality coordinators, or program directors, can benefit from this approach. Remember, only employees who qualify for overtime under the FLSA can be paid using this method.
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Ensure Hours Fluctuate: Make sure that the employees’ work hours change from week to week. This method works well for roles that experience seasonal shifts in workload.
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Get Employee Consent: It’s important to have a written agreement where the employee understands and agrees to the fluctuating workweek arrangement, including how overtime will be calculated.
2. Set a Fixed Salary
You’ll need to decide on a fixed salary that will cover all the hours an employee might work in a week, ensuring it’s enough to meet or exceed minimum wage requirements.
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Estimate Maximum Hours: Think about the busiest time of year. For example, a facilities director might work up to 60 hours a week during the summer season when the camp is at full capacity.
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Calculate Minimum Salary: At the federal minimum wage of $7.25 per hour, the minimum salary for a week with 60 hours would be $435 (60 * $7.25). This ensures that the employee always earns at least the minimum wage, even when their hours are high.
3. Calculate Overtime Pay
Under the FWW method, overtime pay changes depending on how many hours the employee works each week:
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Determine the Regular Rate: The regular hourly rate for the week is calculated by dividing the fixed weekly salary by the total hours worked that week.
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Calculate Overtime Pay: Overtime is then paid at half the regular rate for all hours worked over 40 in a week. For example, if your hospitality coordinator works 45 hours in a week and their salary is $435, the calculation would be as follows:
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Regular Rate: $435 / 45 = $9.67 per hour.
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Overtime Pay: 5 hours of overtime at $4.84 per hour (half of $9.67) equals $24.17.
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Total Pay for the Week: $435 (salary) + $24.17 (overtime) = $459.17.
4. Keep Accurate Records
While employees under the FWW method receive a fixed salary, it’s crucial to keep track of the actual hours worked each week to ensure the correct overtime is paid.
5. Stay Compliant with Laws
Before diving into the FWW method, make sure it complies with both federal and state labor laws. While this method is allowed under federal law, some states have additional regulations on overtime and minimum wage.
Specific Challenges for Camp and Retreat Ministries
Camps and retreats have unique challenges when it comes to managing employee hours:
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Seasonal Fluctuations in Workload: During summer months, roles like facilities directors and hospitality coordinators may easily exceed 40 hours a week. This is when you will need to calculate overtime pay under the FWW method. However, during off-peak months in the winter, the same employees might work significantly fewer hours. The FWW method allows you to balance these seasonal variations without constantly renegotiating pay.
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Long Summer Hours: Employees working long hours in the summer need to feel their compensation is fair and understandable. By clearly explaining how their salary and any additional overtime are calculated, you can help them feel more secure and valued.
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Staff Morale and Communication: Employees, especially those deeply involved in ministry work, should understand that the fixed salary is meant to provide stability. Clear communication is key to maintaining morale and trust, ensuring everyone understands how their compensation works.
Practical Examples for Your Ministry Team
To make this more concrete, let’s look at some real-life scenarios in camp and retreat settings:
Example 1: Facilities Director with Fluctuating Weekly Hours
Your facilities director is paid a weekly salary of $435, with the assumption that their maximum workload could be up to 60 hours a week during peak summer months. Here’s how it works in practice:
This example shows how the pay can fluctuate depending on the hours worked, while the base salary remains steady.
Example 2: Hospitality Coordinator Working Varying Hours
Your hospitality coordinator is paid a fixed weekly salary of $600. During the peak season, their hours can vary greatly:
Tips for Smooth Implementation
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Train Your Payroll Staff: Make sure those handling payroll understand how to calculate overtime under the FWW method and are up-to-date on relevant laws.
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Communicate Clearly with Employees: Regularly explain to your staff how their pay is calculated, especially in roles where hours fluctuate seasonally.
The fluctuating workweek method can provide a fair and flexible approach to managing payroll for employees in camp and retreat ministries. It helps balance the long hours of summer with the shorter hours of winter, ensuring your facilities directors, hospitality coordinators, and other key staff are compensated appropriately and in compliance with the law. By understanding the basics, communicating clearly, and staying organized, ministry leaders can simplify payroll while maintaining a fair and supportive work environment.
For more detailed information on the fluctuating workweek method, check out the guidelines provided by the U.S. Department of Labor.
Bonus: What the Fluctuating Workweek (FWW) Method is NOT
While the Fluctuating Workweek (FWW) method can be a helpful tool for managing payroll at camp and retreat ministries, it’s important to understand what it is not. Misunderstanding how the FWW works can lead to incorrect payroll practices, potential legal issues, and confusion among staff. Here are some common misconceptions about the FWW method and what it does not allow:
1. FWW is NOT a Way to Avoid Paying Overtime
A common misconception is that if an employee works 45 hours in one week, you can simply reduce their hours to 35 the following week to "balance out" the time and avoid paying overtime. This is not how the FWW method works. Under the Fair Labor Standards Act (FLSA), overtime pay is required for any hours worked over 40 in a single workweek, regardless of how many hours are worked in the next week. The FWW method still requires that employees be paid overtime for those extra 5 hours at half the regular rate for that specific week.
Key Point: Each workweek is treated independently for overtime purposes. You cannot average the hours over two weeks to avoid paying overtime.
2. FWW is NOT a Fixed-Rate System for Every Hour Worked
The FWW method does not mean that you pay a single rate for all hours worked, regardless of how many hours an employee works in a week. Employees must still receive their fixed weekly salary plus half-time pay for every hour over 40. For example, if your hospitality coordinator works 45 hours in a week, you must calculate their regular hourly rate for that week based on their fixed salary and pay an additional half-rate for the 5 hours over 40.
Key Point: Hourly overtime pay rates vary by week since overtime under FWW is paid at half the regular hourly rate for each hour over 40 in a given week.
3. FWW is NOT a Method to Reduce Salaries When Employees Work Fewer Hours
Some may think that if employees work fewer hours in a week, they should be paid less. However, under the FWW method, the salary remains fixed regardless of how few or many hours an employee works in a week. If a program director works 38 hours in one week, they still receive their full fixed salary. The only adjustment occurs when calculating the overtime rate for weeks where hours exceed 40.
Key Point: Employees must receive the agreed-upon fixed salary for all hours worked each week, even if they work fewer than 40 hours.
4. FWW is NOT Suitable for Employees with Fixed Weekly Hours
The FWW method is designed for employees whose hours fluctuate from week to week. It does not apply to staff who work the same number of hours each week. For instance, if a camp administrator consistently works 40 hours every week, they should not be compensated using the FWW method, as their hours do not vary.
Key Point: The FWW method is only for employees with genuinely fluctuating work hours.
5. FWW is NOT a Simple Pay Structure for All Employees
The FWW method requires careful calculation each week to determine the correct overtime pay. It is not a "set it and forget it" system. Payroll staff need to be well-trained to calculate the varying overtime rates based on the fluctuating work hours and the fixed salary.
Key Point: The FWW method requires diligent record-keeping and accurate payroll calculations to comply with FLSA rules.
