Dive Brief:
- A nurse staffing firm has agreed to pay $3.2 million to settle a class-action wage and hour suit (Howell v. Advantage RN, LLC, No. 17-cv-00883 (S.D. Cal. Jan. 24, 2020)).
- The nurses claimed the staffing company failed to pay overtime as required by California law; they claimed the staffing company improperly calculated the regular rate of pay, which in turn made the overtime calculations incorrect.
- The nurses said the pay errors constituted unfair business practices under California law, and that they were entitled to waiting time penalties because they were not paid all wages due when their employment with the staffing company ended.
Dive Insight:
The federal Fair Labor Standards Act generally requires that non-exempt employees be paid overtime at a rate no less than 1.5 times the "regular rate of pay" for all hours worked beyond 40 in a workweek. For this reason, it's important to calculate the regular rate correctly.
In December 2019, the U.S. Department of Labor (DOL) issued a final rule updating the "regular rate" definition, with an effective date of Jan. 15.
The rule clarifies when certain employer benefits may be excluded from that calculation, including certain parking benefits, wellness and fitness programs, employee discounts, tuition benefits and adoption assistance. It also clarifies that how a bonus is labeled does not determine whether it is discretionary, and provides examples of discretionary bonuses that may be excluded from an employee's regular rate of pay.
Experts have previously told HR Dive that the new rule may result in employers taking a fresh look at their benefits packages.
