Dive Brief:
- A former employee at a California Sun-Maid fruit processing plant has alleged in a putative collective action that the employer violated both the Fair Labor Standards Act (FLSA) and state law in various ways (Velaquez v. Sun-Maid Growers of California, No. 1:21-cv-00194 (E.D. Calif., Feb. 15, 2021)).
- Among other things, the plaintiff said Sun-Maid required employees to work while they were clocked out for unpaid breaks. It also offered nondiscretionary incentive pay for performance goals but failed to include that pay in workers' regular rates for overtime purposes, the suit alleged.
- Sun-Maid did not respond to a request for comment by press time.
Dive Insight:
Employers generally must pay nonexempt employees overtime for hours worked beyond 40 in a workweek, according to the U.S. Department of Labor (DOL). To calculate overtime pay, employers should provide workers with at least 150% of their regular rate of pay. DOL offers an equation to determine a worker's regular rate: divide total compensation for the workweek by total hours worked in the workweek.
But what constitutes total compensation is sometimes unclear. The regular rate of pay under the FLSA includes "all remuneration for employment paid to, or on behalf of, the employee," according to DOL, but some gift or discretionary bonuses can be excluded.
Collective action suits dealing with overtime claims can lead to hefty employer payouts. Delta in 2019, for example, agreed to pay $3.5 million to settle class allegations that it incorrectly calculated overtime pay under California law for certain nonexempt employees. The airline was accused of failing to include in the regular rate of pay things like shift differential payments, profit-sharing payments and certain bonuses.
