Maria Stearns was quoted in an article by Toni Vranjes that ran on August 16, 2018, in SHRM Online discussing the five common reasons California employers get sued.
Stearns, commenting on Calculating Overtime Bonuses, said “when employers provide extra payments such as bonuses to nonexempt workers, they often fail to properly calculate overtime pay. Nondiscretionary bonuses need to be included in the regular rate of pay for calculating overtime.”
However, when dealing with a flat-sum bonus the California Supreme Court clarified state rules in Alvarado v. Dart Container Corp. of California stating that when calculating overtime in this instance, employers must divide the total compensation earned in a pay period by only the non-overtime hours worked by an employee.
“It’s a very easy type of case for plaintiffs’ attorneys to litigate,” Stearns observed. “The facts are all captured on the pay stub. You either did it right, or you didn’t.”
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