Drillers, Trainee Drillers, Helpers
The Plaintiffs allege that they were not paid the correct amount of overtime wages for all hours worked in excess of 40 hours in a regular workweek. The claims are based upon the company’s policy and practice of:
1) paying these employees a day rate, with no overtime pay and
2) paying these employees by the hour and failing to include non-discretionary bonuses into their regular rate when calculating overtime pay, both of which violate the Fair Labor Standards Act.The case is filed as a collective action on behalf of all similar workers and seeks to recover the unpaid wages and other damages owed to these workers who received day rate pay or hourly pay without overtime. The Day Rate and Hourly Workers assert that they are owed the difference between the rate actually paid and the properly calculated overtime rate.
Where Do Companies Go Wrong with Day Rate and Hourly Pay and Overtime Rules?A worker’s overtime pay rate is based upon their “regular rate of pay”, which is not just his/her standard hourly rate – there is more to it. The regular rate of pay essentially includes all forms of compensation, including base hourly wage, nondiscretionary bonuses, commissions, on-call pay and shift differentials.
A very common mistake made by employers is to merely multiply the employee’s base hourly wage by 1.5 to get the overtime rate, failing to account for any bonus, commission or other compensation items.
The following is an example of the correct calculation for an employee who is paid hourly plus a bonus:
Employee is paid $15 per hour. He worked 45 hours during the workweek, and earned a $500 bonus.
Total pay for the week: ($15 x 45 hours) + $500 bonus = $1,175
Regular rate of pay for the week: $1,175 ÷ 45 hours = $26.11
Additional 1/2 time for Overtime premium: $26.11 x 0.5 x 5 overtime hours = $65.28
Total Weekly Pay Should be: $1,175 + $65.28 = $1,240.28
For more information about how bonus payments can impact overtime pay, see Should My Bonus Be Included In My Overtime Pay Rate?