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DOL: Company failed to include everything in overtime calculation

The U.S. Department of Labor Wage and Hour Division has obtained $165,379 in back wages and damages from a regional health care management company on behalf of 594 workers whose overtime rates were improperly calculated.

The company operates 23 skilled nursing and assisted living facilities in several states. According to the DOL's Wage and Hour Division, the company failed to include shift differentials and nondiscretionary bonuses in the workers' base pay when calculating their overtime rates.

Although the company does not operate in New York, the case is instructive for any employer with nonexempt employees who are entitled to overtime pay. The overtime rate specified in the Fair Labor Standards Act is 1-1/2 times the employee's base rate, which includes items like shift differentials and nondiscretionary bonuses, common in the health care industry.

Since these portions of the employees' base pay were not included, their overtime rates were improperly calculated and they were paid less than they were lawfully owed. Omission of the shift differentials and nondiscretionary bonuses also led to violations of the FLSA's record keeping requirements.

The company, Ide Management Group, LLC, has agreed to pay the employees back pay based on recalculation of their base pay and overtime, along with damages. The company has also changed payroll services and is using new software to make certain it computes pay rates correctly in the future.

"Failing to include shift differentials and bonuses - such as those paid for attendance and retention - when computing an employee's regular rate of pay is a common overtime violation," said a regional administrator of the Wage and Hour Division.

Bonuses and shift differentials are common in the health care field and other industries where employee retention is critical to success. Unfortunately, as the regional administrator noted, miscalculation of overtime is also common.

If you receive more pay for certain shifts than others or receive nondiscretionary bonuses based on your attendance and behavior, consider whether the additional pay is being taken into account when your overtime rate is calculated. If it is not, contact an employment law attorney with experience in wage and hour issues. Your attorney can help you protect your rights while determining the best way to recover damages you may be owed.

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