In California, employees often work diligently to achieve their career goals and contribute to their companies' success. They put in extra hours, especially when the workload gets demanding, with the expectation that their hard work will be fairly compensated.
However, unpaid overtime claims stemming from miscalculated regular rates, often due to bonuses being excluded from the calculation, can short employees on their hard-earned dollars and leave their paychecks light. If you are experiencing this issue in San Diego or anywhere in California, Nevels Nichols, LLP can help you seek justice.
Understanding the Basics of Overtime and the Regular Rate
To comprehend unpaid overtime claims related to incorrect regular rate calculations, it’s essential to first understand how overtime pay is typically calculated. Under the California law, eligible employees are entitled to receive overtime pay at a rate of 1.5 times their “regular rate of pay” for every hour worked beyond 40 hours in a workweek or 8 hours in a day. Additionally during the first 8 hours of work on a seventh consecutive day in the same workweek, employees are entitled to overtime.
However, it is critical to understand that the “regular rate of pay” is not always the same as the employee’s base hourly wage; it must include other compensation, including bonuses, to ensure employees in California receive fair compensation for their extra effort.
Factoring In Bonuses Under Alvarado v. Dart Container Corporation (2018) 4 Cal.5th 542
In Alvarado v. Dart Container Corporation (2018) 4 Cal.5th 542, employees worked in a warehouse and were paid on an hourly basis. However, in addition to their normal hourly wages, the employees received an “attendance bonus” of $15 if they were scheduled to work on a Saturday or Sunday. The California Supreme Court considered how to properly calculate the overtime rate for these employees and how that extra $15 attendance bonus should be factored into the calculation.
As explained by the California Supreme Court in Alvarado, “Under Labor Code section 510 and the IWC wage orders, an employee’s overtime pay rate is a multiple of his or her “regular rate of pay.” The Court reasoned that the weekend attendance bonus needed to be factored into the employee’s regular rate for purposes of overtime calculation. Ultimately the court stated, “[w]e conclude that the flat sum bonus at issue here should be factored into an employee’s regular rate of pay by dividing the amount of the bonus by the total number of nonovertime hours actually worked during the relevant pay period and using 1.5, not 0.5, as the multiplier
for determining the employee’s overtime pay rate.”
In other words, if the employees were paid $15 an hour and worked 40 hours with one attendance bonus, the overtime rate would not be $22.50 ($15 x 1.5 = $22.50) but would instead be $23.06 ($15 x 40 hours = 600 + $15 attendance bonus = $615/40 = $15.38 regular rate x 1.5 = $23.06 overtime rate). This difference in pay can add up to be a substantial amount and can trigger other penalties owed to California employees.
Seeking Compensation for Overtime with Nevels Nichols, LLP
San Diego employees who receive bonuses and work overtime may have issues with the proper overtime rate being used on their paychecks. If you believe that your employer has miscalculated your regular rate of pay, leading to unpaid overtime, it’s essential to consult with experienced employment law attorneys like Nevels Nichols, LLP. We have a deep understanding of California labor laws and are dedicated to helping employees secure their rightful compensation.
Here’s how we can assist you in your unpaid overtime claim:
- Initial Consultation: Our employment attorneys will meet with you to discuss the specifics of your case. We’ll review your employment history, bonus structure, and pay stubs to understand the full extent of the unpaid overtime.
- Legal Analysis: We’ll analyze the legality of your employer’s actions, ensuring that they are in compliance with all California Labor Codes.
- Negotiation and Litigation: Depending on the circumstances, we will engage in negotiation with your employer to recover the unpaid overtime. If negotiation proves unsuccessful, we are fully prepared to litigate your case in court.
- Recovery of Unpaid Overtime: Our primary goal is to help you recover the unpaid overtime you deserve. This may include other legal penalties associated with the non-payment of wages and attorney’s fees.
Reach Out To Nevels Nichols, LLP
Unpaid overtime claims stemming from miscalculated regular rates due to omitted bonuses can have a significant impact on employees in San Diego. Nevels Nichols, LLP is here to ensure that employees are treated fairly and receive the compensation they rightfully earned. If you find yourself in a situation where your overtime pay is in question, don’t hesitate to reach out to our experienced San Diego employment law team. We are dedicated to protecting your rights and helping you seek justice for unpaid overtime claims.
