Half a Million in Overtime Pay Owed to San Francisco Giants Employees
DAY RATE PAY VIOLATIONS
In this case, a recent investigation revealed that non-exempt clubhouse employees who were being paid a fixed day rate of $55 were working a significant number of hours “off the clock” and not being paid the required premium when overtime hours were worked. While the day rate pay was supposed to cover 5 1/2 hours per day, the reality was employees were working more than double those hours off the clock. Day rate pay schemes that violate California workers overtime pay rights are, unfortunately, not uncommon, but are more frequently seen in the restaurant, oil and gas and construction industries. What these improper day rate pay schemes have in common is that they pay workers some set day-rate (eg. $200/day) that is supposed to cover all hours worked during a particular day, but neglect the legal requirement that an additional premium be paid for any overtime hours. Even though paid a day rate, non-exempt employees are entitled to an overtime premium – it’s only the way the premium is calculated that varies from the norm.
To calculate overtime for a day rate employee, first multiply the amount of the employee’s day-rate by the number of days worked during the week (eg $200 day rate x 5 days). Next, divide this by the total number of hours the employee worked in the week (eg $1,000 / 50 hours). The result is the worker’s “regular rate” for the week – in this example, $20/hour. Finally, the “overtime rate” is half the regular rate ($20/2 = $10), which the employee is then owed for each hour worked over 40 in the week.
MISCLASSIFICATION OF SALARIED WORKERS AS EXEMPT
The investigation also uncovered that the ball club had misclassified a number of salaried employees as exempt from overtime pay, including clubhouse managers at the major and minor league levels and video operators at the team’s major and minor league affiliates. Even though paid a salary, based on their job duties, these employees should have been classified as non-exempt employees and paid the required overtime premium. In order to be exempt, it is not enough to merely receive a salary – a worker’s job duties and responsibilities must also satisfy the requirements of at least one overtime exemption. It is also important to note that the exemption tests can be different under California overtime laws than under federal law. In many respects, California Overtime law provides greater overtime pay benefits than does federal overtime law – it not only requires overtime pay for hours over 40 per week but also over 8 per day, up to 12, and double time for hours over 12 per day.
FAILURE TO INCLUDE BONUS PAYMENTS IN THE OVERTIME PAY CALCULATION
Finally, it was discovered that the team had failed to pay overtime or incorrectly calculated overtime pay for administrative staff participating in the Giants’ bonus program. Both federal and California wage and hour laws provide that non-discretionary bonuses must be included in calculating the regular rate of pay on which the overtime premium is based. According to the DOL, “non-discretionary bonuses include those that are announced to employees to encourage them to work more steadily, rapidly or efficiently, and bonuses designed to encourage employees to remain with a facility.” When a particular bonus is offered on a regular basis and employees come to recognize and expect it, the bonus is most likely nondiscretionary.
Because of the strict time limits imposed by the overtime pay laws, procrastination can be costly. Do not rely on your boss or Human Resources for this critical information. If you have any doubts as to your entitlement to overtime, contact the overtime pay experts at The Lore Law Firm for a free and confidential review.
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