Car Seat Manufacturers Sued for Not Including Bonuses in Overtime

In November, an overtime lawsuit was filed in Ohio federal court against two car seat manufacturers who allegedly failed to include bonuses in calculating workers’ pay. According to the class-action complaint, Grammar Inc., and Toledo Molding & Die, LLC paid less in overtime wages to their employees than what was required by the Fair Labor Standards Act (FLSA). The lawsuit was brought forth by Lawrence Carmona, a machine operator who was paid an hourly wage, and the class includes any current or former manufacturing employees at the two companies who were paid bonuses. 

What does the FLSA Say About Bonus Pay and Overtime?

The FLSA is a federal law that outlines the rules for overtime pay. It requires that most employees be paid at one and a half times their regular rate of pay for all hours worked over 40 in a workweek. Section 7 of the FLSA requires nondiscretionary bonuses to be included in calculating the total earnings on which overtime pay must be based. Nondiscretionary bonuses are defined as bonuses that employees know about, such as bonuses given for work quality, efficiency, and attendance. They are different from discretionary bonuses, which are given at the employer’s discretion and thus excluded from the regular rate of pay calculations. According to the lawsuit, bonuses were given to manufacturing employees “as an incentive for hard work”, which would qualify them as nondiscretionary and thus subject to inclusion as regular pay. 

What is happening in Carmona vs. Grammar, Inc. and Toledo Molding & Die, LLC?

In the lawsuit against the car seat manufacturers, the employers did not include bonuses, shift premiums/differentials, or other additional payments in their calculations of their employees’ base pay. As a result, workers received less overtime pay than what would be required as the one-and-a-half multipliers did not apply to the bonuses. Because of this practice, the lawsuit alleges that the “plaintiff and other similarly situated employees have been damaged in that they have not received overtime wages due to them pursuant to the FLSA.” In the lawsuit, the plaintiff seeks to recover unpaid wages from 2019 to the present, as well as liquidated damages, interest, and attorneys’ fees. The two defendants allegedly shared a workforce between the two companies and used similar pay practices. Though “Plaintiff is unable to state at this time the exact size of the potential class”, it is estimated that the group of manufacturing employees who could be considered a part of the class “consists of at least several thousand persons.”

Seek Legal Assistance Today 

Are you having issues with proper overtime pay? If so, seek legal assistance from the Law Office of Christopher Q. Davis, located in New York City and Livingston, NJ. Contact us today at (646) 430-7930 to schedule a free case evaluation and receive experienced legal counsel. 

Our employment lawyers specialize in many areas of law, including FMLA, unpaid wages, and overtime. Whatever your employment issue is, please reach out for a consultation today.