The employee's hours fluctuate from week to week.

The employee receives a fixed weekly salary that does not vary with the number of hours they work, regardless of how many or few.

The employee's fixed weekly salary is sufficient to compensate the employee at a rate of at least the applicable minimum wage, even in weeks they work the most hours.

The employer and the employee have a clear and mutual understanding that the fixed salary is compensation (apart from overtime premiums and any bonuses, premium payments, commissions, hazard pay, or other additional, non-excludable pay of any kind) for all hours worked each week regardless of how many or few. The clear and mutual understanding does not need to extend to the specific method used to calculate overtime pay.

The employee receives overtime compensation, in addition to their fixed salary and any bonuses, premium payments, commissions, hazard pay, or additional, non-excludable pay of any kind, for all overtime hours worked at a rate of at least one-half their regular rate of pay for that week. Because their salary is fixed, an employee's regular rate will vary from week to week and is determined by dividing the salary and any additional, non-excludable pay by the number of hours worked that week.