Tag: wage and hour

FLSA Regular Rate Calculations Accounting for Bonuses: Part 3 of 3.

 

Example #2—Nurse Retention bonuses (Part 3 of 3)

 

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A health care organization’s nursing department gives hourly paid LPNs and RNs a $2,000 bonus after being employed for 6 months to both retain and attract more nursing personnel.  In this instance, the bonus will be included in the regular rate calculation during weeks in the period in which overtime was worked.  The key is to know how the bonus was earned. That is, was it a one time bonus? Or was it for work that was performed over a series of months.  In this example is the latter.

 

The $2,000 retention bonus described above was earned over 6 months or 26 weeks. Equivalently, the weekly bonus can thought of as a weekly bonus of $76.92 ($2,000 ÷ 26 weeks). If an employee works overtime during the 26-week period, the increase in the regular rate is calculated by dividing $76.92 by the total hours worked during the overtime week.

 

The procedure for calculating OT is the same as described in Part 2 of this series.  If the employee worked 10 hours of overtime ( a total of 50 hours of work in the pay period)  in their 9th week of employment, the employee would be due an additional $7.70 in overtime earning in that time period.  The calculation is as follows:

 

1. Calculate the increase in regular rate due to the bonus

$76.92 ($2,000 ÷ 26 weeks) ÷ 50 hours = $1.54 (increase in the regular rate)

Note:  The daily bonus is spread equally of all the hours worked in the time period where there is OT.

2. Calculate the increase in the half time (.5) portion of the OT premium

$1.54 x ½ = $ .77 (increase in the additional half-time premium)

3. Calculate the addition OT premium due to the individual.

$ .77 x 10 hours of overtime worked =     $7.70 (increase in overtime earnings due to the bonus)

 

The calculation can also be performed as described in yesterday’s post.  The results will be the same.  The key is to recognize that the bonus is spread over the time period that the bonus was earned.

Olgetree Deakins attorneys discuss new California wage and hour legislation

Betsy Johnson, Office Managing shareholder in the Los Angeles Office of Ogletree Deakins discusses new California wage and hour and employment legislation in a multi-part series.

AB 10:  State Minimum Wage Increase: AB 10 amends section 1182.12 of the Labor Code to increase the minimum wage to $9 per hour as of July 1, 2014 and to $10 per hour as of January 1, 2016.

AB 241:  Domestic Worker Bill of Rights: B 241 adds section 1450 to the Labor Code and requires that individuals in household occupations (such as nannies, housekeepers, and individuals providing care for the elderly or disabled within a household) be paid overtime compensation at a rate of 1.5 times their regular rate for hours worked in excess of 9 hours per day or 45 hours per week. 

AB 442:  Liquidated Damages for Unpaid Wages: 

SB 435:  Recovery Periods: SB 435 extends requirement to pay an additional hour of pay to situations in which employers fail to provide any “recovery” periods required by Division of Occupational Safety and Health (DOSH also known as Cal/OSHA) regulations. A “recovery” period is a cool down period afforded to employees who work outside to prevent heat illness.

 

 

 

Statistical random sampling messing time records in wage and hour litigation

Many employer time records are still in paper format that is not easily machine readable.  Analyzing these data in a wage and hour case typically requires manual entry of the records.  However, entering in all the time records is not always feasible.  In these situations a statistical random sampling of records can be useful and informative.   A solid statistical sampling alows the researcher to calculate error rates which are useful when making inferences concerning the time records.