Secretary United States Department of Labor v. Bristol Excavating, Inc., No. 17-3663 (3d Cir. 2019)Annotate this Case
Under the Fair Labor Standards Act, 29 U.S.C. 207, employers must pay employees one-and-a-half times their “regular rate” of pay for all hours worked above a 40-hour work week. “[R]egular rate” includes “all remuneration for employment paid to, or on behalf of, the employee,” subject to eight enumerated exemptions but “remuneration for employment” is not defined in the overtime provisions or elsewhere in the Act. The Department of Labor asserted that employers are bound to include bonuses from third parties in the regular rate of pay when calculating overtime pay, regardless of what the employer and employee may have agreed. The district court, agreeing with the Department, concluded that the incentive bonuses at issue must be included in the regular rate of pay because they are remuneration for employment and do not qualify for any of the statutory exemptions. The Third Circuit vacated in part. Incentive bonuses provided by third parties are not necessarily “remuneration for employment” under the Act, depending on the understanding of the employer and employee. In this case, the factual record did not support a finding that all of the incentive bonuses were necessarily remuneration for employment.