An Administrator's Guide to California Private School Law

Chapter 6 – Wage And Hour Laws

 Premium and penalty pay for reporting time pay, extra hour for failure to provide meal period, extra hour for failure to provide break and split shift pay. 719

3. M ETHODS U SED I N C ALCULATING T HE R EGULAR R ATE O F P AY Generally, the hours to be used in computing the regular rate of pay may not exceed the legal maximum regular hours which, in most cases, is eight hours per workday and 40 hours per workweek. 720 The alternate method of scheduling and computing overtime under most IWC Wage Orders, based on an alternative workweek schedule of four 10-hour days or three 12-hour days does not affect the regular rate of pay, which in this case also would be computed on the basis of 40 hours per workweek. 721 However, if the agreed upon regular work hours per week are less than forty, the agreed upon regular hours must be used. For example, if an employee is scheduled to work 35 hours per week, 35 hours is the figure used to determine the regular rate of pay – even if an employee may work more or less hours. 722 In circumstances where the workweek is less than 40 hours, the law does not require payment of the overtime premium unless the employee works more than eight hours in a workday or more than 40 hours in a workweek. 723 Since the regular rate of pay is expressed as an hourly amount, schools must convert any flat- sum bonuses or lump-sum payments into an hourly amount before they can be included in the regular rate of pay calculation. In Alvarado v. Dart Container Corporation, the California Supreme Court held that the divisor for calculating the per-hour value of a flat-sum bonus (or lump-sum amount) is the number of non-overtime hours the employee actually worked during the workweek. 724 The Alvarado decision is limited to flat-sum bonuses or pays. For example, an employee is scheduled to work 40 hours per workweek. The employee earns $30 per hour, works 10 hours of overtime in a workweek (working 50 hours total in the workweek), and earns a lump-sum bonus of $75 for the workweek. To calculate the per-hour value of the $75 bonus, the employer must divide $75 by 40 hours, which is the number of non- overtime hours actually worked in the workweek. The method from the Alvarado case results in a per-hour value of $1.88 for the bonus, which would be added to the employee’s $30 hourly rate to calculate the employee’s regular rate of pay. The resulting regular rate of pay would be $31.88. The employees 10 hours of overtime would be compensated at one-and-one-half times the regular rate of pay, which would be 10 overtime hours x ($31.88 x 1-1/2) = $478.20. LCW Practice Advisor

The method described in Alvarado applies to private employers in California and differs from the federal regulations on how to calculate the regular rate of pay under the Fair Labor Standards Act. The federal regulations use the total number of hours worked in the workweek as the divisor for calculating the per-hour value of a flat-sum bonus. Since private and independent schools are subject to the California wage and hour laws, schools should ensure they are properly

An Administrator’s Guide to California Private School Law ©2019 Liebert Cassidy Whitmore 189