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Total Articles: 8

Cutting Through The Half-Time Murk In "Failed Exemption" Cases

How does one calculate overtime pay due to plaintiffs who were erroneously treated as "white collar" employees exempt from the federal Fair Labor Standards Act's minimum-wage and overtime requirements? Court decisions continue to demonstrate much confusion and misunderstanding on this score.

Cash in Lieu of Benefits Must Be Included in Overtime Calculations, 9th Cir. Rules

Employers that provide cash payments to employees who have health care coverage through a spouse or other means may find themselves thinking of the old adage that "no good deed goes unpunished" in the wake of a new appeals court ruling.

No Good Deed Goes Unpunished – Employer Liable for Not Including Cash-in-Lieu of Benefits Payments in Regular Rate

In a case of first impression, the Ninth Circuit held last week in Flores v. City of San Gabriel that an employer was liable to a class of employees for underpaid overtime compensation stemming from the employer’s failure to include cash-in-lieu of benefits payments in its calculation of the regular rate for overtime purposes. The City provided a Flexible Benefits Plan to its employees, whereby the City provided a designated monetary amount to employees each month for the employee to use to purchase and maintain medical, dental, and vision benefits. Employees were required to use a portion of the funds for dental and vision benefits, but could decline to use the remainder of the funds for medical insurance upon proof that the employee had alternate medical coverage (e.g. through a spouse). If an employee declined to use the funds to purchase medical benefits, the employee would receive the unused portion of the benefits allotment as a cash payment (of between $1,036 to $1,304 per month) added to his or her regular paycheck. For the four years relevant to the lawsuit, between 42%-46% of the City’s total plan contributions were paid to employees as cash for unused benefits. The City designated all of its plan payments as “benefits” that were excluded from its regular rate of pay calculations.

Per Diems and the Regular Rate of Pay: What to Know for Your Overtime Calculation

The United States District Court for the Northern District of Oklahoma in Sharp v. CGG Land (U.S.) Inc., No. 14-cv-0614 (October 19, 2015), recently ruled in favor of an employer that had excluded per diem payments from a regular rate calculation under the Fair Labor Standards Act (FLSA). The plaintiffs filed suit alleging that per diem payments for meal expenses provided to the plaintiff class were not properly included in their regular rate of pay.

Determining When a Commission is "Earned" When Calculating the Regular Rate

In our last post, we discussed the calculation of the “regular rate” and some of the complexities of determining what constitutes “remuneration” under the Fair Labor Standards Act (FLSA). Commission is one of the additional forms of compensation that you must include in a non-exempt employee’s regular rate. Such a calculation is relatively straightforward if all remuneration is paid in the same week as it was earned. What can make this calculation difficult, though, is when the employee earns cash or non-cash remuneration after the workweek ends. Often, employers do not pay commissions or bonuses in the same week as hours worked, but instead at some later date—at the end of a month, a quarter, or a year. Determining the impact of these later earnings on the regular rate may require a look-back calculation to apportion these earnings to their proper, earlier weeks. We’ve discussed how to do this calculation for bonuses before, but let’s take a look at commissions, which can and often do require a slightly different calculation, or at least some additional planning.

Even for Hourly Workers, Calculating the "Regular Rate" Can Be Complex

No matter if you are new to the wage and hour world and this blog, you still probably know that employers need to pay their non-exempt employees an overtime premium for all hours worked in a workweek beyond 40, pursuant to the Fair Labor Standards Act (FLSA) and applicable state law. Whatever overtime rate you implement—whether time-and-a-half or a half-time premium—the overtime rate is always based on the employee’s “regular rate.” In past posts, we have looked at special problems that calculating the regular rate raises for employers who pay non-exempt workers a salary, particularly if the employees also earn commissions or bonuses. Even if compensation paid does not fall into one of these “special” problem buckets, the regular rate calculations for non-exempt employees can prove tricky at times.

A Wolf in Sheep's Clothing is Still a Wolf: The FLSA Regular Rate and Breach of Contract

Recently, I read about a construction contractor in Los Angeles caught in the middle of litigation between its subcontractors and the city, on behalf of the subcontractor’s former employees. According to the employees, the subcontractors had allegedly promised to pay them the prevailing wage for that area of $49.00 per hour, but had only paid them $5.00 to $8.00 instead. Ultimately, the complaint focused on the subcontractors’ falsification of records and misclassification of employees, and related city and state law violations, rather than which rate was the real “regular rate” for FLSA purposes: the proper $49.00 per hour prevailing wage rate the subcontractors had promised, or the actual $5.00 to $8.00 rate they paid. But what if the employees had sought overtime based on the higher rate? Would dressing up a breach of contract claim as one for overtime under the FLSA have worked?

Calculating Overtime for Salaried Employees [Wage & Hour FAQ]

Q. We have a number of non-exempt employees who are nevertheless paid a salary. How do we calculate overtime for these employees?
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