An Administrator's Guide to California Private School Law

Chapter 6 – Wage And Hour Laws

1. P AYMENTS T HAT M UST B E I NCLUDED I N T HE R EGULAR R ATE Any sum paid for hours worked must be included in the calculation. Also, any payments made to employees for performing a duty must be included. For example, an employee is paid a specified amount for a specified number of hours during which the employee is “on call” in addition to overtime compensation for actually being called into work. If the employee who is “on call” is free to come and go as she pleases, the on-call hours are not considered as hours worked. However, since the employee receives a payment for the on-call time, the payment must be included in the employee’s regular rate in the same manner as any other payment for services. Examples of payments which are included in the regular rate are as follows:  Retroactive pay increase 705 ;  Educational and other incentive pay 706 ;  Standby pay 707 ;  Payments for uncontrolled standby time – even though not counted as hours worked 708 ;  Awards for performance on the job 709 ; and  Non-discretionary merit bonuses. 710

2. P AYMENTS E XCLUDED F ROM T HE R EGULAR R ATE Examples of payments which are not included in the regular rate are as follows:

 Gifts that do not depend on hours worked, production, or efficiency; 711  Payments made due to vacation, holiday, illness, failure of the school to provide sufficient work, or other similar payments for time not worked; 712  Reimbursement payments for reasonable expenses; 713  Completely discretionary bonuses; 714  Payments made pursuant to a bona fide profit-sharing plan or trust or bona fide thrift or savings plan; 715  Contributions a school irrevocably makes to a trustee or third person pursuant to a bona fide ERISA plan for providing old-age, retirement, life, accident, or health insurance or similar benefits for employees; 716  Daily overtime compensation as required by the IWC Orders; 717  Overtime compensation paid according to an employment contract or collective bargaining agreement where the overtime rate is at least one and one-half times the rate established in good faith by the contract. 718

An Administrator’s Guide to California Private School Law ©2019 Liebert Cassidy Whitmore 188