The simple answer is yes, fixed bonuses must be included in the hourly rate of pay.
Guaranteed bonuses must be divided by the non-overtime hours regularly worked to determine an employee’s hourly rate. Guaranteed bonuses include daily bonuses in the oil industry such as for directional drillers. Flat rate bonuses such as rent credits for apartment maintenance workers are also the type of bonuses that must be figured into an employee’s regular rate of pay; their hourly rate of pay. This, of course, assumes the employee is nonexempt. Nonexempt employees are not supervisors or higher, and are not persons who hold professional licenses. In order for supervisors to be exempt they must be twice minimum wage. Supervisors earning at least twice minimum wage who spend less than half of their time supervising two or more full time employees are also nonexempt.
if you were Not Paid Your Full Hourly Wage because
Guaranteed Fix Rate Bonuses such as Daily Bonus Rates were not Figured into Your Pay
2018 onward several court cases, including one by the California Supreme Court, and publications from state and federal labor agencies have decided regular hourly pay for nonexempt employees must include not only the agreed to hourly rate but compensation based upon fixed rate bonuses. This means that if a California employee earns $20.00 an hour plus a guaranteed $200.00 a day bonus for working, their regular hourly rate is actually $45.00 an hour. The math on this is $200 divided into 8 = $25.00 an hour in bonus pay. The $25.00 an hour bonus pay must be added to the employee’s regular rate of $20.00 an hour for a total of $45.00 per hour. Hourly rates of pay for bonuses must be based upon the regular number of hours worked. If an employee works overtime or double time the amount of the bonus pay does not fluctuate.
Regular rates of pay based upon bonuses assume the bonus is a guaranteed sum. Regular rates of pay are not based upon discretionary bonuses. Fluctuating bonuses, however, may entitle the employee to additional pay if the fluctuation is based upon different times of the year or different work locations, but is not tied to performance. A directional driller paid a daily rate of $600 a day if sent to work where it is freezing, and $450 a day if they are working in Kern County earns a guaranteed bonus from which the regular rate of pay must be figured. Neither of these bonuses are based upon job performance. The amount of the bonus has merely changed due to the location the oil field worker is sent to.
Baker Hughes and Halliburton were not paying their directional drillers regular rates of pay or overtime based upon their daily rates. These daily rates are flat sum bonuses. The Employment Lawyers Group has cases against both Baker Hughes and Halliburton due to these pay practices. Due to the large amount of the flat rate bonuses these oil field workers were paid, the additional amount of their regular pay and overtime is significant. If a Halliburton employee earned $600 a day as a bonus they are owed $75.00 an hour in regular pay in addition to their regular hourly rate, $112.50 an hour for overtime, and $150.00 an hour for double time. If they were merely paid overtime or double time based upon rates of $18.00 to $26.00 an hour the additional amounts they are owed in overtime over a four year period is huge. Signing a release signs away the employee’s rights to these wages.
Signing a severance agreement to get wages that may be due to you under the WARN ACT, or to get a formulaic amount of severance based upon how long you were employed may be significantly less than what you are owed because flat rate bonuses were not figured into your regular pay, overtime rate, or double time rates of pay. Additionally, the amounts you should have been paid for missed meal and rest breaks is the amount of pay with the bonus. Your employer’s payouts for missed rest and meal breaks may also be wrong.
to Start Your Case for Owed Wages
Employees paid a meal break or rest break premium because they missed their meal or rest break must be paid an hourly rate for each hour of a missed meal or rest break based upon the employee’s regular hourly rate and the hourly rate of their fixed rate bonus. If the employee earned flat rate bonuses the hour of pay paid for the meal break or rest break premium pay must include appropriate additions due to the employee’s flat rate bonus pay. For example, an employee in fracing acid is paid $26.00 an hour regular pay. They receive an additional $45.00 a day bonus. The $45.00 an hour bonus translates into $5.62 an hour. That must be added to the $26.00 an hour wage. The employee must be paid $31.62 for a meal break that was not taken, interrupted, or given after their sixth hour of work for the day started.
Because daily bonus rates are large in the oil industry, the amount due for a missed meal or rest break may be large. We look forward to being able to examine any employee’s paystubs to determine if they were paid the correct amounts for missed meal and rest breaks. If your actual hourly rate is supposed to be $65.00 or more per hour missed meal or rest breaks add up quickly.
Flat sum bonuses must be figured into the overtime rate of pay for nonexempt California employees. Nonexempt employees are those who are entitled to overtime. Just because somebody is salaried does not mean they are necessarily exempt (a qualified employee wage and hour lawyer can explain why). Flat sum bonus means all guaranteed compensation in addition to one’s normal hourly rate. Besides the California Supreme Court and the California appellate courts, on the Federal level there is a July 1, 2019 opinion letter by the U.S. Department of Labor, referencing another letter, stating, “Nondiscretionary bonuses count as remuneration that an employer must include in the regular rate of pay.” It follows that overtime pay must be based upon the correct hourly rate.
The Employment Lawyers Group succeeded in a court ruling in a class action in which the employer argued the term flat rate bonus must be narrowly construed, and cannot include a fixed and agreed to rate for rent credits. At this point, any nonexempt employee who has not been paid an overtime rate based upon the amount of their fixed rate bonus is entitled to the difference between what they were paid and what they should have been paid making their guaranteed bonus part of their regular and overtime rate.
For overtime purposes, in determining the right rate of overtime pay if a flat rate bonus is due to the employee, the bonus is figured based upon the employee’s non-overtime work week. If an employee only works 35 hours a week the bonus would be based upon a 35 hour work week. If the employee is a normal 40 hour a week employee the bonus is based upon a 40 hour work week. It is not based upon the actual number of hours the employee works in excess of 40 in a week.
Lawsuits for a failure to properly pay the correct regular rate of pay and overtime rate if the employee is entitled to additional guaranteed compensation beyond their normal hourly rate should be brought. The vigilant prosecution of these lawsuits will insure the employee is properly paid for every regular hour and overtime hour worked at the right rate of pay. Delay in filing these lawsuits may lead to lapsed statutes of limitation. The statute of limitations for penalties under the Private Attorney General Act (PAGA) is only one year. The statute of limitations for suing to recover wages when the rate of pay was paid wrong is up to four years.
If you are the one to initially bring the PAGA lawsuit you are in control of the case. The same is true with class actions. It is best to be in control of the process and have regular communications with the attorney on the wage and hour class action or PAGA case. Otherwise, you are trusting people you have never met to represent you, and coworkers who may or may not be looking out for your interests.
Lawsuits for recovery of the right hourly rate, correct overtime rate based upon flat rate bonuses, and the right rate of double time pay are lawsuits that also seek to recover various penalties. Besides penalties interest is due from the time the original wage was due. Attorney fees and costs can also be recovered.
If the damages for being paid the wrong hourly rate or wrong overtime rate are large the case can be brought by one employee. If only a few thousand dollars is at stake, the case needs to be brought as a larger action such as a multi-employee case, a class action, or a PAGA action.
Regularly representing oil field workers including directional drillers, cement crews, fracing workers, roustabouts, water truck drivers, pumpers, oil field service technicians, and more.
to Start your Case for being Paid the Wrong Rate of Pay
if you are One Person or Want to Sue on Behalf of Many People