California · flat-sum bonus overtime
California Alvarado flat-sum bonus OT
Alvarado v. Dart Container Corp. of California (2018) 4 Cal.5th 542 / Lab. Code § 510 / DLSE Manual § 49.2.4.2 / DIR Overtime FAQ: a flat-sum nondiscretionary bonus (attendance, stay-to-end-of-season, per-day weekend incentive) is divided by nonovertime hours actually worked — not by total hours (FLSA § 778.209(a)). Combined RR = hourly + bonus hourly; LC 510 then pays full 1.5× / 2× that RR on OT / DT hours (Alvarado rejected FLSA’s 0.5× / 1× on the bonus). Example: $20/h + $100 · five 10h days → $1,237.50 (FLSA-method $1,210). Not CA single-rate OT. Not CA weighted OT. Not FLSA RR. Not MA commission OT (Sullivan excludes commissions/bonuses from RR entirely).
How Alvarado pays
Flat-sum bonuses are not production incentives that grow with each hour worked. Dividing them by total hours (including overtime) dilutes the regular rate as OT grows — the opposite of California’s policy of discouraging overtime. The Supreme Court therefore adopted the DLSE’s rule: divide the bonus by nonovertime hours actually worked in the bonus-earning period, then pay overtime on that bonus increment at the full 1.5× / 2× multipliers.
This calculator: (1) classifies punches under LC 510 (1.5× after 8 through 12 / first 8 on the 7th day; 2× after 12 / after 8 on the 7th; weekly 40 no-stack); (2) sets bonus RR = flat-sum ÷ non-OT hours; (3) sets combined RR = hourly + bonus RR; (4) pays OT/DT at 1.5× / 2× the combined RR. The ticket also shows the FLSA ÷all-hours half-time contrast on the same punches.
$20/h + $100 flat bonus · five 10h days → non-OT 40 · bonus RR $2.50 · combined RR $22.50 · regular $900 · OT $337.50 · total $1,237.50 (FLSA-method $1,210).
$20/h + $40 weekend attendance · Mon–Sat 8h → non-OT 40 · bonus RR $1 · combined RR $21 · total $1,092.
$20/h + $100 · one 14h day + four 8h → 4 OT + 2 DT · total $1,125.
$20/h · no bonus · five 10h → $1,100 (matches /california-overtime/).
Sources
- Alvarado v. Dart Container Corp. of California (2018) 4 Cal.5th 542 (Cal. Supreme Court PDF, S232607)
- SCOCAL · Alvarado v. Dart Container — HTML opinion mirror
- DIR DLSE Overtime FAQ — flat-sum vs production bonus formulas
- DLSE Enforcement Policies and Interpretations Manual — § 49.2.4.2 flat-sum bonus
- Cal. Lab. Code § 510 — daily 8/12, seventh day, weekly 40
FAQ
How is Alvarado flat-sum bonus OT calculated?
Bonus ÷ non-OT hours actually worked → bonus RR; combined RR = hourly + bonus RR; LC 510 pays 1.5× / 2× that RR on OT / DT hours.
Same as FLSA § 778.209?
No. FLSA ÷ all hours and pays only 0.5× / 1× premium on the bonus. Alvarado ÷ non-OT hours and pays full 1.5× / 2×.
Same as /california-weighted-average-overtime/?
No. That page is two hourly rates (778.115); bonuses are out of scope. This page is flat-sum bonus ÷ non-OT hours.
Same as /california-overtime/?
No. Single typed rate there; bonuses out of scope. Zero bonus here matches that pay.
What is a “flat-sum” bonus?
A fixed dollar amount that does not increase with each hour of production — attendance, stay-to-end-of-season, $5 per day worked. Production / piecework / commission incentives that scale with hours use the FLSA contrast path.
Same as /massachusetts-commission-overtime/?
No. Massachusetts § 1A / Sullivan excludes commissions, draws, and bonuses from the regular rate and pays separate OT (often floored at MA MW). Alvarado includes the flat-sum bonus in RR — but divides it only by non-OT hours and pays full 1.5×/2× on that increment under LC 510.
Who is covered?
Non-exempt California employees who earn a flat-sum nondiscretionary bonus in a bonus-earning period that also includes overtime hours under LC 510 / the applicable IWC wage order. Discretionary gifts and true production bonuses are out of scope on this page.