Lab. Code 510 and the Industrial Welfare Commission’s wage orders require employers to pay 1.5 times a worker’s “regular rate of pay” for overtime work (in excess of 8 hours a day or 40 hours a week).  This case decides that when the employer pays the worker a flat sum (here, a $15 bonus for working on a weekend day), that sum must be included in the regular rate of pay, and to convert it into an hourly amount, the flat sum must be divided by the regular (non-overtime) work hours that the employee worked during the pay period.  Also, following Tidewater Marine Western, Inc. v. Bradshaw (1996) 46 Cal.App.4th 640, this decision holds that the Division of Labor Standards Enforcement’s manual regarding its enforcement policies is a regulation and, not having been adopted following the APA’s procedures, is void.  However, though not entitled to any deference, the manual can nevertheless prove persuasive, particularly given the agency’s expertise in administering wage and hour laws.  Here, even though the Supreme Court exercised de novo review of the statute, it found the DLSE’s interpretation of the statute persuasive and adopted it.

California Supreme Court (Chin, J.; Cantil-Sakauye, J. concurring); March 5, 2018; 2018 WL 1146645.