Although each of us must transact to live a satisfying and comfortable life, most fail the fundamentals of transaction; they cannot influence others, labor far more than they’d like, and don’t make the money they could. Most people don’t think accurately about the transactions built to satisfy their aims. They’ve never considered the architecture of these transactions and how the construction of these exchanges either allows them to live as they want—or cripples their ability to meet their aims. Transactional competence is a unique ability that offers ambitious professionals the certainty, freedom, and consistency to satisfy lofty aims. In this workshop, attendees will leave with an understanding of what a transaction is, how they work, and how to speed them up. This model begins an understanding of the architecture of any transaction and the asset and liability of our own personality and transactional behavior.
Each participant will leave with a roadmap to satisfy any aim.
Overtime pay in California is based on the employee’s “regular rate of pay,” which is not always an employee’s normal hourly wage and must include almost all forms of pay that the employee receives. But how do you calculate the regular rate of pay when an employee receives both an hourly wage and a flat sum bonus – such as an extra $15 for working a weekend shift?
This week, the California Supreme Court ruled that an employer must calculate the regular rate of pay by dividing the employee’s total compensation by the number of nonovertime hours an employee worked during the pay period, rather than the total number of hours the employee worked, including overtime hours (Alvarado v Dart Container Corporation of California).
In the case, Dart Container Corporation of California, which manufactures food service products such as cups and plates, allegedly maintained a policy of paying a flat “attendance bonus” of $15 per day to employees who worked Saturday and Sunday shifts, regardless of the number of hours worked on the weekend shift. An employee sued, claiming he was improperly paid overtime during the weeks that he earned the weekend attendance bonus.
The employee argued that overtime pay on any flat sum bonus should be divided only by the “regular” hours he worked that week (the method in the Division of Labor Standards Enforcement [DLSE] manual), not by the “total” hours worked during the week (regular hours plus overtime hours worked, the federal formula). For example, to determine the employee’s regular rate of pay, you would divide only by 40 regular hours instead of 48 total hours (regular hours plus overtime hours). This would result in a higher regular rate of pay and, thus, a higher overtime rate.
The lower court followed the federal formula for calculating overtime on flat sum bonuses and rejected the DLSE’s method found in its Enforcement Manual — finding that the manual is only guidance and not legally binding, and that California had no controlling law.
Supreme Court Agrees with Employee
The California Supreme Court unanimously reversed the lower court and approved the DLSE method of calculating the regular rate of pay when a flat sum bonus is involved: Employers must divide the employee’s total compensation by the employee’s nonovertime hours worked (not by the total hours worked).
The Court reasoned that a flat sum bonus is not tied to the number of hours worked – the $15 will be paid when an employee picks up a weekend shift, regardless of how many hours the employee worked that week. Because the flat sum bonus was payable even if the employee didn’t work overtime, only the nonovertime hours should be considered when calculating the regular rate of pay.
The Court also based its ruling on two other policy factors:
Interestingly, the Court held that the DLSE manual is a void underground regulation and not entitled to any deference. But, despite this holding, the Court held that it could consider the DLSE’s interpretation of the law if the Court was independently persuaded it was correct —which in this case it was.
The California Supreme Court was presented with an employer who was seemingly trying to do the right thing — giving its employees a bonus and taking that bonus into account when calculating overtime pay. The employer relied on a commonly used federal formula to calculate the regular rate of pay where there was no specific controlling state law on the issue.
Despite these efforts, the Court found against the employer. The employer asked the Court to only apply the decision going forward – as it would be unfair to hold the employer liable when no statute specifically addressed the flat-sum bonus calculation. Unfortunately, the Court determined that the employer should not be given a “free pass” and that its holding would apply retroactively, not just going forward.
This decision is limited to flat-sum bonuses, but we may see employees argue that it should apply to other types of extra compensation.
Employers who want to give “extra pay” to hourly workers should consult legal counsel.
CalChamber members can test their knowledge of some of the rules and exceptions for paying overtime in California in the Overtime Quiz. Not a member? Learn more about what HRCalifornia can do for you.
Message from our CEO
The trends in the Oxnard tourism industry are quite sunny!
I’m fortunate to serve on the board of directors for the Oxnard Convention & Visitors Bureau. The experience affords me the opportunity to keep up with how our hoteliers are doing and what the trends are in the tourism sector of our local economy. I’m happy to report we have started 2018 on a high note!
Granted there are a lot of factors that affect hotel statistics, and certainly the Thomas fire and Montecito mudslides had a big impact on our region. But for the month of January Oxnard was on top of the occupancy rate and in second place for average daily rate. Here is the data:
Occupancy rates for January 2018
Thousand Oaks 64.7
Ventura County 69.0
Santa Barbara County 64.7
Los Angeles 67.5
Average daily rates for January 2018
Thousand Oaks 116.1
Ventura County 126.2
Santa Barbara County 152.7
Los Angeles 127.9
All of this hotel activity certainly impacts other businesses in Oxnard. Our restaurants, entertainment, and retail all benefit from increased hotel business. But let’s not forget about local government. The transit occupancy tax every hotel guest pays generates more than $5 million annually for the city’s coffers. That’s a substantial number and it doesn’t take into account what our hotels pay in property tax each and every year.
So next time you have out of town guests or you are planning a corporate meeting, utilize the great selection of hotels in Oxnard and generate some revenue for other local businesses and the city.
There wasn’t much elbow room at River Ridge Golf Club last Thursday when the Oxnard Chamber presented a candidates’ forum for the special recall election on May 1. The sold-out crowd of business leaders heard from three of the four incumbents targeted by the recall. Of the 14 candidates running for mayor or city council, nine participated in the forum.
The Chamber sincerely thanks Dr. Herb Gooch, Professor of Political Science at California Lutheran University for moderating the program.
Click here to read the forum coverage by the Ventura County Star.
The Vagabond Inn Oxnard, located at 1245 N Oxnard Blvd., Oxnard, CA 93030, provides a clean, comfortable stay in the heart of downtown Oxnard. The hotel offers daily complimentary continental breakfast, free parking, and free WiFi. Guests can relax and swim in the heated pool or unwind in air-conditioned guest rooms with refrigerators, microwaves, cable TV, and HBO. Spa rooms with soaking rubs are available on request.
As a very local business, the hotel sits just minutes from countless opportunities for entertainment and adventure. There’s something for everyone: the Oxnard Performing Arts & Convention Center is a 5 minute drive south of the hotel, outlet shopping is only 15 minutes east, and the great outdoors call in every direction.
Guests of the Vagabond Inn Oxnard enjoy beautiful day trips to Channel Island Harbor, a local favorite with superb dining and annual festivals. They can also see the California coast on scenic drives to nearby Port Hueneme, Ventura, or Santa Barbara.
Hot deals and discounted rates for the Vagabond Inn Oxnard can be found on VagabondInn.com. Current rates are $80 for queen bed guest rooms and $90 for double bed guest rooms. Children (under 18) stay free with parents. Occasionally, guests receive free room upgrades on check-in. Great value, friendly people – it’s how Vagabond Inn does things.
On a local note, the hotel thanks Oxnard’s own Sal Mancha (City of Oxnard Planning Division) for making its amazing lobby map.