If so, you may be entitled to additional overtime wages. In Flores v. City of San Gabriel, the United States Ninth Circuit Court of Appeals ruled that an employer must include “cash in lieu of benefits” payments made to workers when determining their “regular rate of pay” for overtime purposes under the Fair Labor Standards Act (“FLSA”). Employees who work more than forty hours in a seven-day workweek are entitled to overtime compensation under the FLSA, which is 1.5 times a worker’s “regular rate of pay.” In general, the “regular rate of pay” for overtime purposes is defined as “all remuneration for employment paid to or on behalf of the employee.” So, all payments (commissions, non-discretionary bonuses, cash-in-lieu of benefits, etc.) must be factored into each worker’s “regular rate of pay.”
In Flores, the plaintiffs sued the city claiming that the city had violated the FLSA by failing to include the cash-in-lieu benefits they received in their normal rate of pay. The City of San Gabriel provided a fund to each employee for the purchase of medical, dental, and vision benefits. Employees who had alternative coverage could opt out of purchasing benefits and instead, receive cash payments that were included in the worker’s regular paychecks. These cash payments are known as “cash-in-lieu of benefits.” The City of San Gabriel did not include the payments in the calculation of its employees’ regular rates of pay. The Court rejected the City of Gabriel’s argument that the payment should be excluded since they were not tied to hours worked.
Thus, if you are paid cash instead of receiving benefits such as health insurance, you may be entitled to additional overtime wages if your employers did not factor in the cash payment in calculating your overtime benefits. Call the attorneys at Bohrer Brady, LLC, for a free, confidential initial evaluation of your claim. Our team can help determine whether your employer or former employer complied with all federal and state wage and hour laws.
