Overtime Pay on Workplace Bonuses Should be a Given

Fresno, CAThe recent class action lawsuit news regarding alleged overtime rate violations at Darden Restaurants--parent of popular restaurant chains Olive Garden and Red Lobster--continues to highlight how prevalent overtime complaints are particularly in services and sales. Factors such as tip pooling, meal breaks, shift differentials, bonus pay and lack of clarity regarding exempt vs. non-exempt jobs can make wage determinations difficult--and often not in favor of the employee once payday comes.

Consider bonus pay and shift premiums. When factored into an employee's pay for overtime purposes, their inclusion results in a higher rate of overtime than what would be achieved were those payments not to be included. Overtime lawsuits over this very issue have begun to emerge recently--but many non-exempt California workers probably aren't even aware that they should closely review how their how bonuses or incentive pay might impact their overtime pay.

One current case involves current and former employees of Office Depot, who have launched an overtime bonus lawsuit. Plaintiffs feel that temporary increases to their regular wage through the issuance of bonus payment(s) should be duly reflected in overtime computation, resulting in a higher overtime payment based on an increased base amount than what might have ordinarily been achieved using the regular rate.

At issue is whether bonus payments identified in this case could be interpreted as discretionary.

A similar overtime bonus lawsuit involves current, and former employees of The Wellpoint Companies, who accuse the defendant of failing to properly compute overtime stemming from base pay, in addition to non-discretionary bonus payments, based on achieving performance goals.

Similar allegations can be made about a bonus on shift premium. To wit, often employees are paid a premium for working a late-night or overnight shift. Such a premium, litigants claim, should be duly added to an employee's regular rate of pay for computation of overtime. When this fails to happen, a shift premium bonus lawsuit can often ensue.