Risks of Overtime Multiply


I was just checking with the Department of Labor‘s local investigator regarding a wage classification issue. He informed me that the “word” has come down from HQ that the investigators are to now start calculating the penalty on wage claims at a 1.5 premium instead of the .5 premium when additional pay such as bonuses or premium payments are involved. In other words, to qualify for the flexible work week, there may be no bonuses or premium payments involved as they consider those to be “incompatible” with the fluctuating workweek method of computing overtime.

This is a HUGE change in policy and procedure, and is certainly the DOL’s first step in attempting to move away from the Supreme Court’s opinion in Overnight Transportation Co. v. Missel, 316 US 572 (1942). Plaintiffs have been arguing for years that the reliance on Missel to award only a .5 premium to employees who have been improperly classified as exempt is unfair. It is my understanding that the DOL will be interpreting any misclassification under this new standard. So, if the employee received bonuses or premium payments, and they were improperly classified as exempt, the argument the DOL intends to use is that since the fluctuating workweek does not apply, Missel does not apply and therefore the payment premium amount is 1.5 instead of .5.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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