Under the FLSA, an employee must be paid 1.5 times the regular rate of pay for hours beyond 40 in each 7 day period. In a case of first impression in this and other circuits, this case holds that any compensation paid the employee is used to compute the regular rate of pay even if the compensation is not paid on an hourly basis. Thus, payments that the employer made to employees in lieu of medical insurance benefits (if they had such insurance through a spouse’s employer) should have been included in the regular rate of pay for purposes of computing overtime pay. Also, the case holds that even though this precise question had not previously been decided at the circuit level, the employer’s statutory violation was willful, leading to a longer statute of limitations and liquidated damage liability. The employer put on no evidence to show that it surveyed applicable case law or took other reasonable efforts to determine whether its legal interpretation was supported by authority.
Ninth Circuit Court of Appeals (Davis, J.; Owens, J., concurring); June 2, 2016; 2016 WL 3090782