- Written by Kevin Cleveland
A California Appeals Court recently clarified how to calculate overtime which includes certain flat sum bonuses: Calculate them according to federal rules. In Alvarado v. Dart Container Corp. of California, Dart Container’s written policy stated that an attendance bonus of $15 per day would be paid to any employee who was scheduled to work a weekend shift and completed the full shift regardless of the hours worked beyond the normal scheduled length of a shift. (Please note that this is not a piece rate case.)
The Employer calculated the amount of overtime paid during a particular pay period by spreading out the attendance bonus over all hours worked during the pay period. By spreading out the bonus over all hours, the “regular rate” of pay used to calculate the rate at which “overtime premium” is paid was lowered compared to if the bonus was applied to a single day where large amounts of overtime were worked. The “overtime premium” was then added to the straight hourly pay for all overtime hours worked and the employee was paid for the overtime they worked in that pay period.
- Written by Carl Larson