Employer improperly calculated overtime pay in violation of the Fair Labor Standards Act when it paid employees for overtime at a rate less than 150% of their usual non-overtime pay. Employer violated the FLSA’s overtime payment requirement by the way it calculated overtime pay. When an employee did not work overtime, he was paid his entire piecework rate plus a production bonus of 1/6 of that rate. So 7/6 of the piecework rate should have been used as the base, regular pay in computing overtime wages at 150% of regular pay. However, the employer’s pay plan improperly reduced the production bonus by the amount of any overtime premium the employer had to pay in weeks when the employee worked overtime, thus resulting in overtime compensation that was less than 150% of 7/6 of the piecework rate.
Ninth Circuit Court of Appeals (Dorsey, J.); March 21, 2017; 2017 WL 1055588