Employers may violate the FLSA by failing to pay their employees the proper hourly rate. This can occur by paying overtime at the same rate as straight time, versus time and one-half. It can also occur when the employer fails to include bonuses and shift pay in the employee’s regular hourly rate. For more information, please view Calculating Minimum Wage & Overtime.
Not Paying for Total Hours Worked
Employers may violate the FLSA by failing to pay their employees for the total hours they have worked. This may include failing to pay for time such as:
a. time spent cleaning equipment or putting on a uniform before work begins;
b. break time;
c. travel time;
d. time you worked late without being asked to do so;
e. work at home.
Errors in calculating overtime rate
The DOL has provided published guidance on over 6 different ways to calculate the hourly rate and overtime based on the hourly rate. You can understand how come employers can calculate both the hourly and overtime rate incorrectly. One common overtime violation is due to the misunderstanding by companies and employees on the significance of a bonus. There’s difference between a discretionary bonus and non-discretionary bonus.
- Have you received a bonus on top of your regular paycheck amount?
- Do you receive year end bonuses?
- Have you received performance bonuses?
- Have you received promised bonuses for meeting a quota?
- Do you regularly receive bonuses that is linked to some type of metric?
- Does your employer promise you a bonus based on you completing a set wage requirement?
Non-discretionary bonus can increase the overtime rate
Every time you get a non-discretionary bonus, your hourly rate and overtime rate for that week must be re-calculated to a higher rate. The overtime law is very clear that the FLSA requires the non-discretionary bonus to be included in the regular rate of pay for overtime purposes. A non-discretionary bonus is not based on a company’s annual profit. A non-discretionary bonus if an employee meets a required wage obligation.
Many of our class and collective action lawsuits involved employers that payed the correct amount of overtime but at the wrong overtime rate. They paid overtime based on the fixed hourly rate or a fixed salary and failed to account for the non-discretionary bonuses.