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[PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 19-12655
____________________
HECTOR HERNANDEZ,
on his own behalf and on behalf of those similarly situated,
Plaintiff-Appellee,
versus
PLASTIPAK PACKAGING, INC.,
a Foreign Profit Corporation,
Defendant-Appellant.
____________________
Appeal from the United States District Court
for the Middle District of Florida
D.C. Docket No. 8:17-cv-02826-JSM-SPF
____________________
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2 Opinion of the Court 19-12655
Before LUCK and BRASHER,* Circuit Judges.
LUCK, Circuit Judge:
Under the Fair Labor Standards Act, employers must pay
non-exempt employees for their overtime hours “at a rate not less
than one and one-half times the regular rate at which [they are]
employed.” 29 U.S.C. § 207(a)(1). In Overnight Motor Transpor-
tation Co. v. Missel, 316 U.S. 572 (1942), the Supreme Court exam-
ined how to apply this statutory requirement to employees who
work “irregular hours for a fixed weekly wage.” Id. at 573. The
answer is today known as the fluctuating workweek method.
Where an employee has a “fixed salary” and works fluctuating
hours, her employer need only pay for her overtime hours at a rate
of “one-half” of her “regular rate of pay.” See 29 C.F.R. § 778.114(a)
(2016).
The issue in this case is whether Plastipak Packaging, Inc.
paying Hector Hernandez bonuses—a shift premium for night
work and holiday pay—on top of his fixed salary precludes the use
of the fluctuating workweek method. After reviewing the Act, the
Supreme Court’s decision in Missel, and the Department of Labor’s
regulatory guidance, we hold that it does not. So long as an em-
ployee receives a fixed salary covering every hour worked in a
week, the payment of a bonus on top of the employee’s fixed salary
does not bar an employer’s use of the fluctuating workweek
* This opinion is being entered by a quorum pursuant to 28 U.S.C. § 46(d).
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19-12655 Opinion of the Court 3
method to calculate overtime pay. Because the district court erred
in concluding otherwise, we reverse the district court’s summary
judgment for Hernandez and remand for further proceedings con-
sistent with this opinion.
I. FACTUAL BACKGROUND AND PROCEDURAL
HISTORY
The fluctuating workweek method
Before we talk about how Plastipak paid Hernandez, it’s
helpful to first explain how the fluctuating workweek method
works. Under the Act, an employer must pay non-exempt employ-
ees for overtime hours “at a rate not less than one and one-half
times the regular rate at which [they are] employed.” 29 U.S.C.
§ 207(a)(1). Take, for example, an hourly worker who earns ten
dollars an hour. This employee would be entitled to overtime pay
of fifteen dollars for each hour worked over forty hours—“one and
one-half” times her regular rate. This method of calculating over-
time pay is known as “time and one-half.” See Davis v. City of
Hollywood, 120 F.3d 1178, 1179 (11th Cir. 1997).
But some workers receive a fixed salary, rather than an
hourly wage, and work fluctuating hours each week. For workers
with a fixed salary and variable weekly hours, the employer can use
the fluctuating workweek method to determine overtime pay. Un-
der this approach, the employer calculates the employee’s regular
rate by “dividing [the] weekly salary by the number of hours actu-
ally worked” that week. Lamonica v. Safe Hurricane Shutters, Inc.,
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4 Opinion of the Court 19-12655
711 F.3d 1299, 1311 (11th Cir. 2013). When using this method, an
employer need only pay for overtime hours at a rate of one-half
times the employee’s regular rate—not at one and one-half times.
That’s because the employee “has already been compensated at the
straight time regular rate” for those hours “under the salary ar-
rangement.” Id. (citation omitted); see also Condo v. Sysco Corp.,
1 F.3d 599, 605 (7th Cir. 1993) (“The fixed salary compensates the
employee [working variable hours] for all his hours, the overtime
ones included. He therefore receives 100% of his regular rate for
each hour that he worked. As such, he is entitled only to an addi-
tional fifty percent of his regular rate for the hours that he worked
in excess of forty.” (emphasis omitted)).
Here’s an example of how the fluctuating workweek
method works. Take an employee with a fixed weekly salary of
$1,000 who works variable hours. In a week where she works fifty
hours, her regular rate would be $20 an hour ($1,000 divided by
fifty hours) and she would be entitled to overtime pay for ten hours
(every hour worked over the fortieth hour). Under the fluctuating
workweek method, this employee would be entitled to $100 as
overtime pay for her ten hours of overtime (one-half of her regular
rate multiplied by ten). Although this employee’s overtime pay is
lower compared to an employee whose overtime pay is calculated
using the time and one-half method, the tradeoff is she still earns
her full $1,000 fixed salary even in weeks where she works less than
forty hours.
Hernandez’s regular and overtime compensation
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19-12655 Opinion of the Court 5
Plastipak is a plastic packaging company with manufactur-
ing facilities across the country. Hernandez worked for Plastipak
from March 14, 2011, until May 15, 2016. He worked in the Plant
City, Florida facility as a process technician and later as a mainte-
nance technician.
Hernandez was a salaried “non-exempt” employee, mean-
ing that he was covered by the overtime provisions of the Act.
Plastipak paid Hernandez a fixed biweekly salary of $1,964.99, but
the number of hours he worked varied each week. Sometimes he
worked forty hours or more. Sometimes he worked less than that.
Either way, Plastipak paid him his full fixed salary regardless of the
total hours that he worked in a week.
Plastipak also paid Hernandez an overtime premium when-
ever he worked more than forty hours in a workweek. Plastipak
used the “fluctuating workweek” method to calculate Hernandez’s
overtime pay. Hernandez signed a form when he was hired ac-
knowledging that Plastipak would use this method to determine
his overtime pay.
Plastipak used a more generous version of the fluctuating
workweek method to determine Hernandez’s overtime pay. It cal-
culated his regular rate for a given week by dividing his weekly sal-
ary by forty hours (rather than by the total number of hours he
worked that week). Plastipak then multiplied Hernandez’s regular
rate by the number of overtime hours he worked that week (rather
than multiplying half of his regular rate by his overtime hours).
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6 Opinion of the Court 19-12655
Here’s Plastipak’s formula in action. Take a week where
Hernandez worked fifty hours. His weekly fixed salary was $982.50
(half of his biweekly salary of $1,965). Under the fluctuating work-
week method, Hernandez’s regular rate for this week would be
$19.65 an hour ($982.50 divided by fifty hours), and he would re-
ceive $98.25 in overtime pay (one-half his regular rate multiplied
by ten overtime hours). But under Plastipak’s approach to over-
time, Hernandez’s regular rate for this week would be $24.56 an
hour ($982.50 divided by forty hours) and he would receive $245.60
in overtime pay (his regular rate multiplied by ten overtime hours).
There were two final parts to Hernandez’s compensation.
First, Plastipak paid him a “shift premium” of $30 when he worked
the night shift for a week. If Hernandez worked less than a full
week on the night shift, the shift premium was prorated based on
the number of night hours he had worked. In other words, Plasti-
pak paid him an additional $0.75 for each night hour. In weeks
where Hernandez worked night hours and worked over forty
hours, Plastipak paid him an extra $0.75 for each night hour
worked over forty hours.
Plastipak also gave Hernandez “holiday pay.” If Hernandez
did not work on a holiday, he was credited as if he had worked
eight hours that day. If he did work on a holiday, he was credited
as having worked an additional eight hours beyond the actual time
he worked that day. To receive these credited hours, Hernandez
was required to work the scheduled workdays before and after the
holiday.
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19-12655 Opinion of the Court 7
The district court proceedings
Hernandez sued Plastipak in 2017, bringing a single claim
under the Act for recovery of overtime pay.1 Hernandez alleged
that Plastipak violated the Act by failing to pay time and one-half
compensation for his overtime hours.
Both parties moved for summary judgment. Plastipak ar-
gued that it properly used the fluctuating workweek method to cal-
culate Hernandez’s overtime pay because he received a fixed bi-
weekly salary and his hours “fluctuated from week to week.” The
additional compensation from the night shift premium and holiday
pay didn’t bar the use of this method, Plastipak argued, because
Hernandez’s “base salary” remained fixed each week. Plastipak
also argued there was a “clear mutual understanding” that the fluc-
tuating workweek method would apply to Hernandez’s overtime
payments, as shown by the acknowledgment Hernandez had
signed.
Hernandez responded that Plastipak was precluded from us-
ing the fluctuating workweek method because he didn’t receive
fixed “straight time pay.” His weekly compensation varied depend-
ing on the number and type of hours he worked, Hernandez ar-
gued, because of the shift premium he received when he worked
night hours and because of his holiday pay. Hernandez argued that
1 Hernandez sued Plastipak on his own behalf and on behalf of those similarly
situated. The district court denied Hernandez’s motion to conditionally cer-
tify a collective action and the case proceeded on an individual basis.
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8 Opinion of the Court 19-12655
he was entitled to summary judgment because Plastipak didn’t pay
him time and one-half of his regular rate for his overtime hours,
and because there was no clear mutual understanding between the
parties that the fluctuating workweek method would apply to his
overtime payments.
The district court granted summary judgment for Hernan-
dez. The district court said that an employer had to satisfy four re-
quirements to use the fluctuating workweek method: (1) “the em-
ployee’s hours fluctuate from week to week”; (2) “the employee
receives a fixed salary that does not vary with the number of hours
worked” in a week; (3) “the fixed salary at least equals the mini-
mum wage”; and (4) “the employer and employee share a ‘clear
mutual understanding’ that the employer will pay the fixed salary”
regardless of the number of hours the employee works in a week.
The district court analyzed only the second factor—whether Her-
nandez received a “fixed salary”—because it was “dispositive.”
Hernandez’s “straight time pay was not fixed,” the district
court concluded, because it varied as a result of the “additional pay”
that he received on top of “his base weekly salary.” The district
court ruled that Hernandez’s bonuses for night shifts and holidays
“offend[ed]” the method’s requirement of a “fixed weekly salary.”
The district court reasoned that a salary isn’t fixed just because the
“base salary” doesn’t fluctuate; rather, “the addition” of “bonuses”
to an employee’s “base pay,” the district court concluded, “renders
the [fluctuating workweek method] inapplicable.” Because the dis-
trict court determined that the absence of a fixed salary was
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19-12655 Opinion of the Court 9
dispositive, it didn’t address whether there was a clear mutual un-
derstanding between Plastipak and Hernandez about the use of the
fluctuating workweek method to calculate his overtime pay.
The district court entered a $1,870.52 judgment for Hernan-
dez, the amount of his unpaid overtime wages within the statute
of limitations. Plastipak appeals from the district court’s summary
judgment.
II. STANDARD OF REVIEW
We review de novo the district court’s summary judgment,
viewing the evidence and all reasonable inferences in favor of the
nonmoving party. McKenny v. United States, 973 F.3d 1291, 1296
(11th Cir. 2018). A district court should grant summary judgment
only if there’s “no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a).
III. DISCUSSION
The district court granted summary judgment for Hernan-
dez because paying an employee extra “bonuses and premiums”
“offend[s]” the fluctuating workweek method’s “requirement of a
‘fixed weekly salary.’” In other words, the district court concluded
that the “addition of shift differentials or bonuses” to an employee’s
salary renders the fluctuating workweek method “inapplicable.”
Hernandez similarly argues that he didn’t have a fixed salary be-
cause “Plastipak provided [him]” with “additional
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10 Opinion of the Court 19-12655
compensation”—his night shift premium and holiday pay—on top
of his salary. We disagree. The applicable Supreme Court prece-
dent and the department’s regulatory guidance show that provid-
ing an employee with additional compensation, like production bo-
nuses or holiday pay, on top of his fixed salary is not inconsistent
with the fluctuating workweek method. Plastipak’s payment of ad-
ditional bonuses on top of Hernandez’s fixed salary did not make
his fixed salary any less fixed.
We begin with the relevant statutory text. The Act, enacted
in 1938, requires employers to pay employees for their overtime
hours—hours worked in excess of forty hours a week—“at a rate
not less than one and one-half times the regular rate at which [they
are] employed.” 29 U.S.C. § 207(a)(1). An employer who fails to
do so is liable for the employee’s “unpaid overtime compensation.”
Id. § 216(b). Thus, so long as each hour of overtime work was
worth to Hernandez “not less” than one and one-half times the
value of a normal hour of work in a week, Plastipak’s overtime
payments complied with the Act.
But the Act is silent as to the application of its overtime pro-
visions to salaried employees, let alone salaried employees who
work fluctuating hours. In 1938—the same year of the Act—the
department took its first stab at addressing this silence and issued
an interpretive bulletin explaining how to calculate overtime pay
for people like Hernandez: employees who work “an irregular or
fluctuating number of hours” in a week for a “fixed basic salary.”
Maximum Hours and Overtime Pay, 1942 Wage & Hour Man. 113
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(1942). 2 This bulletin provided that employees who receive a
“fixed basic salary,” regardless of the number of hours worked in a
week, are entitled for overtime pay “to a sum, in addition to the
basic salary, equal to one-half the regular rate of pay multiplied by
the number of hours which he works in excess of [forty] in the
week.” Id. (emphasis in original). Critically, this bulletin explained
that, where a salaried employee does not work a “regular number
of hours,” the “fluctuating workweek” method calculates the em-
ployee’s regular rate by taking “the weekly wage (including pro-
duction bonuses, if any)” and averaging it “over the total hours
worked each workweek.” Id. at 105 (emphasis added). In the same
year that the Act was passed, the department said that bonuses
were compatible with the fluctuating workweek method.
In Missel, the Supreme Court addressed the application of
the Act to the situation contemplated by the department’s 1938 bul-
letin: an employee who “work[ed] irregular hours for a fixed
weekly wage.” 316 U.S. at 573. Although “[n]either the wage, the
hour[,] nor the overtime provisions” of the Act spoke of “any other
method of paying wages except by hourly rate,” the Court had “no
doubt that pay by the week, to be reduced by some method of com-
putation to hourly rates”—in other words, salaried work—“was
also covered by” the Act. Id. at 579. For an employee who earns
“a fixed weekly wage” for “regular contract hours,” id. at 580,
2The 1938 bulletin was reprinted in the department’s 1942 Wage and Hour
manual.
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calculating her regular rate is simple—“[w]age divided by hours
equals regular rate,” id. at 580 n.16. The “same method of compu-
tation” applies, the Court explained, for an employee who earns “a
weekly wage” for “variable or fluctuating hours.” Id. at 580. In
that case, the employee’s regular rate is calculated by dividing the
weekly salary by the number of hours the employee actually
worked that week. See id. Although the employee’s regular rate
varies based on the number of hours worked in a week, “it is regu-
lar in the statutory sense inasmuch as the rate per hour does not
vary for the entire week.” Id.
In applying the Act’s overtime provisions to an employee
working irregular hours for a fixed wage, the Missel Court said its
reading of the Act was the same as the department’s 1938 interpre-
tive bulletin. Id. at 580 n.17 (explaining that its interpretation of
the Act “has been the [department’s] interpretation of the Act”). In
other words, the Supreme Court adopted the department’s 1938
bulletin—agency guidance providing that, when calculating the
regular rate for a salaried employee working fluctuating hours, em-
ployers should take “the weekly wage (including production bo-
nuses, if any)” and average it “over the total hours worked each
workweek[.]” Maximum Hours and Overtime Pay, 1942 Wage &
Hour Man. 105 (1942).
Then, in 1968, the department issued 29 C.F.R. section
778.114(a). This regulation adopted Missel and gave further guid-
ance as to the fluctuating workweek method. Like the situation
addressed by Missel, this regulation addresses employees who earn
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19-12655 Opinion of the Court 13
a “[f]ixed salary for fluctuating hours.” 29 C.F.R. § 778.114(a)
(2016). 3 Not a fixed “total compensation package”—a “fixed sal-
ary.” “Salary,” in turn, means “fixed compensation”—not total
compensation—“paid regularly (as by the year, quarter, month, or
week) for services.” Salary, Webster’s Third New Int’l Dictionary
(unabridged ed. 1966). And “fixed” means “not subject to change
or fluctuation.” Fixed, Webster’s Third New Int’l Dictionary (un-
abridged ed. 1966).
Section 778.114 covers workers employed on a salary basis
who have hours “which fluctuate from week to week,” so long as
the salary is paid “pursuant to an understanding with his employer
that he will receive such fixed amount as straight time pay for
3 In 2019, the department proposed a rule meant to “clarify that bonus pay-
ments, premium payments, and other additional pay are consistent with” the
fluctuating workweek method. See Fluctuating Workweek Method of Com-
puting Overtime, 84 Fed. Reg. 59590, 59591 (2019). In 2020, the department
adopted the proposed changes to section 778.114(a). See Fluctuating Work-
week Method of Computing Overtime, 85 Fed. Reg. 34970 (2020). Section
778.114(a) now provides that “bonuses, premium payments, commissions,
hazard pay, or other additional pay of any kind” on top of a fixed salary are
compatible with the method. 29 C.F.R. § 778.114(a) (2020). But the “Supreme
Court has held that administrative rules generally are not applied retroac-
tively.” Hargress v. Soc. Sec. Admin, Comm’r, 883 F.3d 1302, 1308 (11th Cir.
2018); Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208 (1988) (“Retroac-
tivity is not favored in the law . . . and administrative rules will not be con-
strued to have retroactive effect unless their language requires this result.”).
Because Hernandez worked for Plastipak from 2011 to 2016, the 2020 amend-
ment to section 778.114(a) has no bearing on this case.
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14 Opinion of the Court 19-12655
whatever hours he is called upon to work in a workweek, whether
few or many.” 29 C.F.R. § 778.114(a) (2016). Consistent with Mis-
sel, the regulation provides that for these employees,
[w]here there is a clear mutual understanding . . . that
the fixed salary is compensation . . . for the hours
worked each workweek, whatever their number, . . .
such a salary arrangement is permitted by the Act if
the amount of the salary is sufficient to provide com-
pensation to the employee at a rate not less than the
applicable minimum wage rate for every hour
worked in those workweeks in which the number of
hours he works is greatest, and if he receives extra
compensation, in addition to such salary, for all over-
time hours worked at a rate not less than one-half his
regular rate of pay.
Id. Section 778.114 doesn’t say that an employer using the fluctu-
ating workweek method cannot give an employee additional com-
pensation on top of the fixed weekly salary. But it does say that
“[w]here all the legal prerequisites for use of the ‘fluctuating work-
week’ method of overtime payment are present, the Act, in requir-
ing that ‘not less than’ the prescribed premium of [fifty] percent for
overtime hours worked be paid, does not prohibit paying more.”
Id. § 778.114(c).
Hernandez’s argument is based on the premise that every
single payment (other than his overtime payments) Plastipak paid
him was a part of his “salary,” and thus, his salary fluctuated and
was not “fixed.” But this isn’t right. Section 778.114 requires an
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19-12655 Opinion of the Court 15
employee to receive a “fixed salary,” and it also requires that she
receive “extra compensation, in addition to such salary, for all over-
time hours worked at a rate not less than one-half his regular rate
of pay.” Id. § 778.114(a). The compensation an employee receives
is not the same as the fixed salary; the salary is a subset of the em-
ployee’s compensation. Elsewhere, the department’s regulations
discuss “[b]onus payments”—“payments made in addition to the
regular earnings of an employee,” id. § 778.208 (2016)—and explain
when and how to factor in an employee’s bonuses when “compu-
ting [her] regular hourly rate of pay and overtime compensation,”
id. 778.209(a) (2016). Thus, an employee’s salary isn’t tantamount
to her total “earnings.” The fixed salary represents the unchanging
compensation that an employee is paid regularly (biweekly, in this
case) for services. It doesn’t include “bonus payments,” which are
irregular payments “made in addition to” the employee’s “regular
earnings.”
When we interpret statutory language, we must “give effect,
if possible, to every clause and word of a statute.” Duncan v.
Walker, 533 U.S. 167, 174 (2001) (quotation omitted). “When Con-
gress uses different language in similar sections, we should give
those words different meanings.” McCarthan v. Dir. of Goodwill
Indus.-Suncoast, Inc., 851 F.3d 1076, 1089 (11th Cir. 2017) (en banc)
(citation and quotation marks omitted). So too with regulations.
The department tells us that an employee’s “fixed salary,” “com-
pensation,” and “bonuses” are different things, so we should give
them different meanings. The central premise underlying
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16 Opinion of the Court 19-12655
Hernandez’s argument—that all payments to an employee other
than overtime payments get lumped into the fixed salary—has no
basis in the regulation’s text.
Here, Hernandez was “employed on a salary basis” and re-
ceived a “fixed salary” as “compensation” for “the hours worked
each workweek, whatever their number.” Id. § 778.114(a). Plasti-
pak paid Hernandez a fixed biweekly salary of $1,964.99 “as straight
time pay for whatever hours he [was] called upon to work in a
workweek, whether few or many.” Id. Hernandez’s hours fluctu-
ated but his salary didn’t; he received his full fixed salary regardless
of whether he worked five hours in a workweek or fifty. This sal-
ary arrangement was “sufficient to provide compensation to” Her-
nandez “at a rate not less than the applicable minimum wage rate
for every hour worked in those workweeks[.]” Id. And Plastipak
paid Hernandez “extra compensation, in addition to [his fixed] sal-
ary, for all overtime hours worked at a rate not less than one-half
his regular rate of pay.” Id. In fact, Plastipak paid Hernandez sig-
nificantly more than one-half his regular rate of pay for his over-
time hours, as we showed above, but the Act didn’t prohibit Plasti-
pak from “paying more.” Id. § 778.114(c). Nothing in the plain
language of the regulation removed Hernandez from its scope just
because Plastipak occasionally paid him more for night shift work
and holidays on top of his fixed salary.
There is one other piece of helpful agency guidance. In
1999, the department issued an opinion letter explaining that sec-
tion 778.114 doesn’t prohibit an employer from using the
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19-12655 Opinion of the Court 17
fluctuating workweek method simply because the employee also
receives “additional payments” for holidays and vacation days. See
U.S. Dep’t Labor, Wage & Hour Div., Op. Ltr. FLSA, 1999 WL
1002399, at *2 (May 10, 1999). “Where all the legal prerequisites
for the use of the fluctuating workweek method of overtime pay-
ment are present,” the department explained, the Act, “in requiring
that ‘not less than’ the prescribed premium of [fifty] percent for
overtime hours worked be paid, does not prohibit paying more.”
Id. This agency guidance shows that an employee receiving extra
compensation, like holiday or vacation pay, doesn’t offend section
778.114’s requirement of a “fixed salary” as a prerequisite for apply-
ing the fluctuating workweek method.
Consistent with Missel and this regulatory guidance, the
First Circuit has held that section 778.114 allows for the payment
of bonuses on top of a fixed salary. Lalli v. Gen. Nutrition Ctrs.,
Inc., 814 F.3d 1, 4 (1st Cir. 2016). The employee in Lalli, who
worked at a store selling health and wellness products, “earned a
guaranteed weekly salary regardless of the hours worked that week
and a non-discretionary sales commission that varied based upon
the amount of eligible sales attributed to him for that week.” Id. at
2. Whenever the employee worked over forty hours in a week, his
employer used the fluctuating workweek method to calculate his
overtime premium. Id. In other words, “Lalli was paid a fixed sal-
ary for whatever hours he worked, and Lalli’s earned commissions
were added to his regular rate calculation.” Id. at 4–5. The em-
ployee argued that because he also received sales commissions,
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18 Opinion of the Court 19-12655
which “varied from week to week,” he didn’t have a fixed salary as
required by section 778.114. Id. at 2.
The First Circuit disagreed, holding that the payment of a
bonus in addition to the fixed salary “does not foreclose the appli-
cation of section 778.114 with respect to the salary portion of the
pay structure at issue.” Id. at 4. Because the employee received
the required one-half overtime premium on top of his regular rate
for his overtime hours, this “compensation arrangement “pass[ed]
muster” under “the plain language of” section 778.114. Id. at 5.
The Lalli Court rejected the same argument that Hernandez makes
here: “that any additional form of compensation that must be fac-
tored into an employee’s regular rate removes the pay scheme as a
whole from the purview of section 778.114[.]” Id. at 6. This argu-
ment was “unpersuasive,” the First Circuit said, because “[s]ection
778.114, by its plain language, requires a fixed salary for hours
worked, not a fixed total amount of compensation for the week.”
Id.
We reach the same conclusion and hold that paying an em-
ployee a bonus, on top of the fixed weekly salary, doesn’t preclude
an employer from using the fluctuating workweek method to cal-
culate the employee’s overtime pay. We agree with the First Cir-
cuit that to read section 778.114 to categorically prohibit additional
compensation on top of the fixed salary would amount to rewriting
the regulation; but we “cannot, and should not, ignore the plain
language of the regulation[.]” See id. at 7. So, we won’t.
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19-12655 Opinion of the Court 19
Our holding is consistent with Missel, which ratified the de-
partment’s 1938 bulletin—which, in turn, said that the fluctuating
workweek applies even where an employee receives a bonus on
top of a fixed salary. Maximum Hours and Overtime Pay, 1942
Wage & Hour Man. 105 (1942). It is consistent with the plain text
of section 778.114, which requires a “fixed salary” as compensation
“for the hours worked each workweek, whatever their number,”
rather than a fixed total amount of compensation for the work-
week. 29 C.F.R. § 778.114(a) (2016). And our holding is consistent
with the department’s 1999 opinion letter, which explained that
paying employees with a fixed salary “additional payments” “be-
yond their regular salary” for holidays and vacations is allowed un-
der the regulation. See U.S. Dep’t Labor, Wage & Hour Div., Op.
Ltr. FLSA, 1999 WL 1002399, at *2 (May 10, 1999).
Hernandez offers three reasons why his night shift premium
and holiday pay prohibited Plastipak from using the fluctuating
workweek method. None are persuasive.
First, Hernandez argues that we must liberally construe the
Act in favor of employees to the fullest extent of its remedial
measures. But this argument “relies on the flawed premise” that
the Act “pursues its remedial purpose at all costs.” Encino Motor-
cars, LLC v. Navarro, 138 S. Ct. 1134, 1142 (2018) (cleaned up).
The Supreme Court clarified in Encino Motorcars that courts
“have no license to give” exemptions to the Act “anything but a fair
reading.” Id. Although the fluctuating workweek method is not
an exemption to the Act, see Thomas v. Bed Bath & Beyond, Inc.,
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20 Opinion of the Court 19-12655
961 F.3d 598, 607 (2d Cir. 2020) (stating that the method is “an ap-
plication of and not an exception to” section 207), the Encino Mo-
torcars Court explained that “exemptions are as much a part of the
[Act’s] purpose as the overtime-pay requirement,” 138 S. Ct. at
1142. We must do what we always do where there is no “textual
indication” to give a statute a narrow or a broad reading; we must
give the text of the Act “a fair reading.” Id. at 1142–43.
In any event, Hernandez does not explain how a liberal ra-
ther than a fair interpretation of the Act has any bearing on the is-
sues in this case. See A. Scalia & B. Garner, Reading Law: The
Interpretation of Legal Texts 366 (2012) (explaining that the “liberal
construction” canon only has “an identifiable meaning if it
means . . . nothing more than a rejection of ‘strict construction’ and
insistence on fair meaning.”). We do not see, and Hernandez does
not tell us, how a liberal rather than a fair reading of the Act could
swing the analysis in his favor.
Second, Hernandez argues that we should rely on the de-
partment’s guidance in 2011, which prohibited employers from us-
ing the fluctuating workweek method as to employees who earned
bonuses on top of their salary. But this agency guidance didn’t
modify the text of section 778.114. In 2008, the department issued
a notice of proposed rulemaking, seeking to update section 778.114
and clarify that bonuses were compatible with the fluctuating
workweek method. See Updating Regulations Issued Under the
FLSA, 73 Fed. Reg. 43654, 43655 (2008). In a 2011 final rule notice,
however, the department changed its mind, declined to adopt the
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19-12655 Opinion of the Court 21
proposed changes to section 778.114(a), and left the regulation in-
tact. See Updating Regulations Issued Under the FLSA, 76 Fed.
Reg. 18832, 18850 (2011) (“[T]he final rule has been modified from
the proposal to restore the current rule”). Thus, the 2011 final rule
notice didn’t modify section 778.114(a)’s unambiguous text or oth-
erwise substantively change the regulation. This final rule notice
doesn’t resolve the issue before us; the plain and undisturbed text
of the regulation does.
And third, at oral argument Hernandez said for the first time
that, even if the fluctuating workweek method allows an employer
to pay bonuses, we should draw a distinction between bonuses re-
lated to hours and bonuses related to performance. Hernandez
maintained that “the distinguishing characteristic” in the depart-
ment’s 1938 bulletin and 1999 opinion letter—which approved of
“production bonuses” and “additional payments” for holidays and
vacations—is that “in both scenarios neither of the bonuses were
tied to hours worked or types of hours worked in the workweek at
issue.” In other words, Hernandez alternatively argues that bo-
nuses on top of a fixed weekly salary are compatible with the fluc-
tuating workweek method, provided that the “additional money is
not tied to the type of hour worked.”
Hernandez’s new argument comes too late. We do not con-
sider arguments raised for the first time at oral argument. See Hol-
land v. Gee, 677 F.3d 1047, 1066 (11th Cir. 2012) (declining to con-
sider a party’s “last-minute attempt to raise” an “alternative argu-
ment” because “we do not consider arguments . . . ‘made for the
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22 Opinion of the Court 19-12655
first time at oral argument.’” (citation omitted)); APA Excelsior III
L.P. v. Premiere Techs., Inc., 476 F.3d 1261, 1269 (11th Cir. 2007)
(explaining that we do not consider arguments “made for the first
time at oral argument”).
Regardless, we reject Hernandez’s proposed line between
bonuses for performance like commissions (acceptable) and bo-
nuses for hours worked like shift premiums (unacceptable). Noth-
ing in section 778.114 bars either or distinguishes between the two.
Rather, the regulation requires that the employee receive a “fixed
salary” as compensation for “whatever hours he is called upon to
work in a workweek, whether few or many,” and overtime pay
“for all overtime hours worked at a rate not less than one-half his
regular rate of pay.” 29 C.F.R. § 778.114(a) (2016). It doesn’t pro-
hibit the employee from receiving additional compensation on top
of the fixed salary. And once we accept that additional payments
on top of the fixed salary are consistent with section 778.114 (a
premise that Hernandez’s alternative argument accepts), that’s the
ballgame. Whether an employee receives bonuses for perfor-
mance or for the type of hours worked, neither form of additional
pay offends section 778.114—provided that the employee receives
a “fixed salary” covering every hour, whether few or many, in the
workweek.
Hernandez’s proposed line between performance bonuses
and shift premiums is outright refuted by the department’s guid-
ance. The 1999 opinion letter allowed an employer, paying its em-
ployees a “fixed salary for fluctuating hours under 29 CFR [section]
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19-12655 Opinion of the Court 23
778.114,” to give them “additional payments” “beyond their regu-
lar salary” for holidays and vacation days. U.S. Dep’t Labor, Wage
& Hour Div., Op. Ltr. FLSA, 1999 WL 1002399, at *2 (May 10,
1999). A bonus payment for a holiday is not a performance bonus.
It’s a bonus related to the type of hour worked. That the depart-
ment approved of this type of extra pay undercuts Hernandez’s
claim that section 778.114 prohibits bonuses tied to the specific
hours an employee works.
The First and Fifth Circuits have made the same distinction
between performance and hour bonuses that Hernandez relies on.
See Lalli, 814 F.3d at 5–7 (holding that additional pay for shift dif-
ferentials is not compatible with the fluctuating workweek
method, but additional pay for sales commissions is because the
employee’s salary “remains fixed regardless of the number or type
of hours worked”); Dacar v. Saybolt, L.P., 914 F.3d 917, 926 (5th
Cir. 2018) (“Time-based bonuses, unlike performance-based com-
missions, run afoul of the [fluctuating workweek] regulations be-
cause they make weekly pay dependent on the type of hours
worked.”). But, as we’ve explained, this distinction has no support
in section 778.114. The regulation does not say that some bonuses
are good while others are bad. It does not distinguish between bo-
nuses for hours and bonuses for performance. It just requires that
the employee receive a “fixed salary [as] compensation for the
hours worked each workweek, whatever their number[.]” 29
C.F.R. § 778.114(a) (2016). That’s what Hernandez received. His
salary was fixed, even if Plastipak sometimes paid him more on top
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24 Opinion of the Court 19-12655
of his fixed salary. Thus, Plastipak was allowed to apply the fluctu-
ating workweek method to calculate Hernandez’s overtime pay.
IV. CONCLUSION
The district court erred in concluding that the fluctuating
workweek method couldn’t apply to Hernandez because of his
night shift premium and holiday pay. We reverse the summary
judgment for Hernandez and remand for the district court to con-
sider, consistent with this opinion, whether Hernandez’s overtime
pay was lawful under the Act, Missel, and section 778.114. We note
that the district court didn’t address any other requirements for the
fluctuating workweek method, including whether there was a clear
mutual understanding between Plastipak and Hernandez that this
method applied to his overtime pay, or whether Plastipak correctly
applied the method to calculate Hernandez’s overtime pay. We
leave it to the district court to address these questions on remand.
REVERSED AND REMANDED WITH INSTRUCTIONS.