Case Illustrates Problem of Bonuses Not Being Included in Overtime Pay Rate
A case just filed in Corpus Christi, Texas on behalf of a group of oilfield workers deals with this exact issue. The case claims that the defendants, suppliers of “a broad range of services to the oil and gas industry, including production-related rental tools, workforce accommodations and logistics, oil country tubular goods distribution, hydraulic workover services, and land drilling services”, had a pre-determined formula for the payment of significant bonuses to its employees – making these bonuses non-discretionary. It, however, failed to include these bonus payments when it came time to calculate the overtime premiums due to its workers – thereby substantially underpaying them for each overtime hour. The complaint specifically states:
[Workers] received a guaranteed salary for the first forty (40) hours worked in a workweek. However, the vast majority of [their] compensation came in the form of nondiscretionary bonuses that were paid… on an hourly basis for all hours worked in excess of forty (40) hours in a workweek. Specifically, if [a worker] was called out on a job and worked as a “helper,” he would receive a non-discretionary bonus of $20.00 per hour. If… called out on a job as an “operator,” he would receive a non-discretionary bonus of $25.00 per hour.
The applicable labor laws require that non-discretionary bonuses be included in a non-exempt employee’s pay rate upon which their overtime pay rate 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.” This is precisely the type of bonus program the oilfield workers in this case claim they were working under.
This scenario is one that is quite familiar to employment law firms like ours that handle overtime claims nationwide. Miscalculations of employee overtime pay rates (always in favor of the employer) due to the payment of bonuses or other compensation that should legally be included, is something we commonly see happening to those who work not only in the oilfields, but in the health care, financial services and retail fields as well. Because this type of overtime wage law violation is more difficult for employees to pick up on, versus the more blatant violations where straight time is paid for all hours worked or a day-rate is paid with no overtime, it is very important that workers be aware of their legal rights involving overtime pay and not blindly rely on the boss or Human Resources for this critical information.
Because of the strict time limits imposed by the overtime pay laws, procrastination can be costly. 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.
Call 1-866-559-0400, email firstname.lastname@example.org or submit your information using our convenient Case Evaluation form for a FREE and CONFIDENTIAL review of your circumstances, because time is money.