Cash Benefits Must be Included in Overtime Pay Calculations

Cash Benefits Must be Included in Overtime Pay Calculations

SAN GABRIEL, Calif. — In a victory for workers across the country, a California federal court recently ruled cash benefits must be taken into account when calculating overtime payments for employees.

The U.S. Court of Appeals for the Ninth Circuit overturned an appeal by the city of San Gabriel in an unpaid overtime lawsuit brought by members of the city’s police department.

That lawsuit asks the court for three years of unpaid overtime because the city had failed to include the cash benefits the city paid out to its police officers in lieu of traditional benefits like health care. The city employed a flex-benefit plan to allow police officers and other city employees to purchase their own health care but were allowed to keep the cash if it could be demonstrated they had pre-existing coverage.

By declining to buy coverage with the money provided, employees could take in an additional $1,000 to $1,300 a month. Many of the plaintiffs involved either had their own healthcare plan from a spouse’s insurance or other source.

Plaintiffs Awarded Back Overtime Wages, Liquidated Damages

The suit at the center of the appeal secured not only back overtime wages for the plaintiffs but also liquidated damages equal to the amount of unpaid overtime. Furthermore, the court granted the plaintiffs three-years of unpaid overtime wages since it determined the city’s Fair Labor Standards Act (FLSA) violations were willful because it had been put on notice about the situation.

Under the FLSA, employees must be paid at least one and a half times their regularly hourly rate for overtime wages. Federal laws set the overtime threshold at 40 hours per week and plaintiffs can recover back pay by filing civil lawsuits in federal court.

FLSA overtime pay lawsuits can recover not only back wages, but liquidated damages equal to the unpaid overtime, attorney’s fees, court costs, and any other relief the court may see fit to award. Furthermore, courts may impose injunctions on violators to ensure others are not subject to the same violations in the future.

FLSA Overtime Lawsuits

Call (855) 754-2795 or complete the Free Unpaid Overtime Case Review form on the top right of this page if you feel that you and and other employees believe that your wage rights are being violated under the FLSA. Our top-rated team of unpaid wage lawyers will evaluate your situation to determine your best course of action to help you seek justice.

Our office will also determine if it is in your best interest to file a lawsuit against your employer. Because strict time limitations apply for filing these types of claims, we advise you contact our experienced unpaid overtime wage attorneys at your earliest convenience and preserve your legal rights.

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