Thursday, May 25, 2017

Benefits Opt-Out Payments Must Be Included in Overtime Calculation

Just in case employers needed any more reason to end their opt-out payment practices, this is from Kate McGovern Tornone over at the HR Daily Advisor:
The U.S. Supreme Court has left intact a 2016 appeals court ruling addressing how benefits opt-out payments interact with the Fair Labor Standards Act (FLSA). 
In a case of first impression, the 9th U.S. Circuit Court of Appeals (which covers Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington) ruled that when an employer pays an employee cash for opting out of its health insurance, that payment must be considered part of the employee’s “regular rate of pay” under the FLSA. This means it must be used in calculating compensation for overtime hours. ...
The 9th Circuit agreed with the city that its ruling may cause employers to discontinue cash-in-lieu of benefits payments, but said its hands were tied....
Full story here.