Recently, the California Supreme Court handed down a decision regarding the calculation of the rate of pay for overtime, which is anything but user friendly. A number of our members have indicated they are confused by the specifics of the decision. The following information is meant to clarify the details.
In California, the multiplier for calculating overtime pay is based on an employee’s regular rate, which is not always an employee’s normal hourly wage. The “regular rate of pay” must include almost all forms of compensation that the employee receives. But how do you calculate the regular rate of pay when an employee receives both an hourly wage and a flat sum bonus or incentive – such as an extra $25 for working a weekend shift? This is at the crux of the case in question, Alvarado v Dart Container Corporation of California.
In the case, Dart Container allegedly maintained a policy of paying a flat “attendance bonus” of $15 per day to employees who worked Saturday and Sunday shifts, regardless of the number of hours worked on the weekend shift. A Dart employee (Alvarado) sued, claiming he was improperly paid overtime during the weeks that he earned the weekend attendance bonus.
Alvarado argued that overtime pay on any flat sum bonus or incentive should be divided only by the “regular” (non-overtime) hours he worked that week (the method used by the California Division of Labor Standards Enforcement [DLSE]), not by the “total” hours worked during the week (regular hours plus overtime hours worked – which is the formula used by the federal government and many other states). Under the DLSE method, if an employee worked 48 hours in one week, an employer would calculate the regular rate of pay by dividing 40 regular hours instead of 48 total hours (regular hours plus overtime hours) by all compensation earned in that week. This would result in a higher regular rate of pay and, thus, a higher overtime rate. What was not clear before this case was whether the DLSE method was the law of the state.
After hearing the arguments, the California Supreme Court unanimously approved the DLSE method of calculating the regular rate and held that when a flat sum bonus or incentive is involved the total compensation earned in that week should be divided by only the regular hours worked, but also include the compensation earned as a flat sum bonus. Employers must divide the employee’s total compensation by the employee’s non-overtime hours worked, not by the total hours worked.
The Court reasoned that a flat sum bonus is not tied to the number of hours worked – the $15 will be paid when an employee picks up a weekend shift, regardless of how many hours the employee worked that week. Because the flat sum bonus was payable even if the employee did not work overtime, only the non-overtime hours should be considered when calculating the regular rate of pay.
FYI, the Court also based its ruling on two other policy factors:
- California requires premium overtime pay which is meant to discourage employers from imposing overtime work.
- California labor laws are interpreted liberally in favor of worker protection.
Interestingly, the Court held that the DLSE manual is a void underground regulation and not entitled to any deference, but nevertheless applied that standard. Should you have questions please contact at CALSAGA Executive Director Rahn A. Rahn directly at (916) 508-5177 or by e-mail at rrahn@calsaga.org.
Time is running out to register for Managing Private Security (formerly PPO 101) and Growing Your Private Security Company (formerly PPO 102)!
Our management programs will take place next week in Orange County.
In an ever changing legislative climate, it is essential to ensure that you are complaint with the law and insurance regulations as well as maximize efficiency and productivity. In addition, Managing Private Security (formerly PPO 101) will cover contracts and legal pitfalls, human resources, pricing and profitability and BSIS compliance and audit.
Growing Your Private Security Company (formerly PPO 102) is a new program focused on helping PPO companies grow their businesses! Come to learn tips on prospecting, RFP’s, dealing with procurement, pricing, legal deal breakers, insurance concerns, transitions, recruitment and staffing accounts, building employee files and client follow up.
Don’t miss your chance to attend these great learning opportunities!
You can register for one or both days. Registration includes a light breakfast and catered lunch. Registration closes Sunday, April 15th at 6:00pm.
Register today!
Orange County
April 18th – 19th
See complete details and purchase tickets at:
https://calsaga.org/ppo101and102/
REGISTER TODAY!
Sponsor and Vendor opportunities are still available! Contact Kris at Kris@calsaga.org for more info.
View the full schedule.
California’s economy is larger than that of any other state. That’s why it’s a great place to live and a great place to do business.
But doing business here can also be confusing – not to mention frustrating, taxing, and perplexing! You’ve got to think about licenses, insurance, human resources hurdles, client retention and about a thousand other things. On top of all of that the California Code of Regulations requires you to issue a Certificate of Completion to each officer for each training course that you provide.
Here are the requirements according to Division 7 of Title 16 Section 7583 of the Code:
The certificate shall identify the course(s) taken, the number of hours of training provided, identification of the issuing entity, name of the individual and instructor and a date, and state that the course(s) comply with the Department of Consumer Affairs’ Skills Training Course for Security Guards. The certificate shall be serially numbered for tracking.
Sure, on it’s own, that’s not a lot. But then you add in hiring employees, financial administration, creating proposals, management of sales cycle and your plate is pretty full. Now that we’ve caused your blood pressure to go up, let us give you some good news. The CALSAGA Training Database tracks your officers’ training and generates certificates that are compliant with the law and BSIS approved. And the best news is that there’s nothing additional to pay because that service is included with your membership!
We wish it could restock your office supplies and complete all of your employees’ performance reviews but it can help you stay organized and give you confidence in the face of a BSIS audit.
Sample Certificate
If you’re ready to get started with using the Database today email Kate at Kate@calsaga.org or log into your account through the CALSAGA Member Portal. Check out the Instructions for the CALSAGA Training Database which is a great resource for those who are new to working with the database. Don’t hesitate to reach out to Kate who can answer your database questions or provide assistance.
Need to purchase training materials? No problem! We offer traditional modules in PDF format which can be purchased directly from CALSAGA as well as online training through ProtaTECH, CALSAGA’s Online Training Provider. Purchase AB 2880 Training Materials
Access to the database is reserved exclusively for members. Not a member but want access to this great tool? JOIN TODAY.
And lastly, if some of the topics mentioned in this email – licensing, insurance, human resources, RFPs, client retention – are giving you anxiety, make sure to register for PPO 101 and PPO 102! (**This event has now past. Please visit CALSAGA Training Events for information about upcoming events.)
Registration is now open for our next session of PPO 101 and 102 to be held in Santa Ana on April 18th and 19th!
Our Sacramento sessions of PPO 101 and PPO 102 which were held in February were a great success. Now it’s your turn, Southern California!
PPO 101 tackles topics such as legal pitfalls, insurance compliance, contracts, human resources challenges and best practices, pricing and administration. This program is applicable for both industry veterans and newly licensed PPO-holders.
Newly redesigned, PPO 102 focuses on helping businesses like yours to grow! Attendees will take away tips on prospecting, RFP’s, dealing with procurement, legal deal breakers, insurance concerns, transitions, recruitment and staffing accounts, building employee files and client follow up.
You can attend one or both days. Registration includes a light breakfast and buffet lunch.
Orange County
April 18 – 19
See complete details and purchase tickets at:
https://calsaga.org/ppo101and102/
We are pleased to announce that the first edition of The Californian: The Quarterly Newsletter of CALSAGA is now available! Click here to read The Californian.
Registration for our first management programs of 2018 are now open!
PPO 101 covers important topics such as human resources challenges and best practices, insurance compliance, legal pitfalls, pricing and administration, contracts, and more!
Already attended PPO 101? There’s always new and updated information to discover! Consider attending again.
PPO 102 is a new program focused on helping PPO companies grow their businesses! Come to learn tips on prospecting, RFP’s, dealing with procurement, legal deal breakers, insurance concerns, transitions, recruitment and staffing accounts, building employee files and client follow up.
You can register to attend one or both days!
February 21st – 22nd
Hilton Garden Inn Near the Sacramento Airport
2540 Venture Oaks Way
Sacramento, California 95833
Click here for registration, pricing, schedule and hotel information.
We will also be hosting PPO 101 and 102 in Southern California April 18th – 19th. Location information to follow.
As an association we strive to keep you up-to-date on relevant information for your business. Please review the information below from the BSIS.
FIREARM ASSESSMENT – NEW DATE OF IMPLEMENTATION
Senate Bill 547 (Chapter 429, Statutes of 2017) was signed into law by Governor Brown to extend the January 1, 2018 implementation date for the new assessment. Under the new law, the assessment will begin on a date to be determined by the Bureau but no later than July 1, 2018. The Bureau is continuing its efforts to secure a third party vendor to administer the assessment. Be assured that the Bureau will issue an interested parties email when a vendor is secured as well as notify BSIS certified firearms training facilities and instructors of the start date for the assessment.
You can review the changes made to the assessment start date in Business and Professions Code Section 7583.47 at http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180SB547
Are you preparing to take the exam for ASIS International’s Certified Protection Professional accreditation? Check out the information below regarding the review course offered by ASIS Interational Region 1 D. Click here to register.
And don’t forget to ask for CPP credit when you attend a CALSAGA event!
