California court sides with B-Dubs on overtime calculation

Buffalo Wild Wings employees recently alleged the restaurant chain violated the law by using the "rate-in-effect" method rather than the "weighted average" method in calculating their overtime rate of pay. In a win for the employer, the California Court of Appeal affirmed the trial court's dismissal of their claim under the Private Attorneys General Act (PAGA).

The court's decision, however, is limited to the facts of this case. Indeed, the court expressly stated it wasn't addressing the overtime calculation method employers must "always" use but instead was addressing whether the use of the rate-in-effect method was lawful in this situation.

Facts

In 2011, several Buffalo Wild Wings employees filed suit against the company, alleging it violated the law by using the rate-in-effect method instead of the weighted-average method when calculating overtime for dual-rate employees. They claimed California law requires the company to use the weighted-average method, by which dual-rate employees are paid for overtime based on an hourly rate calculated by adding all hours worked in one pay period and dividing that number into their total compensation. Buffalo Wild Wings used the rate-in-effect method, by which dual-rate employees are paid for overtime hours based on the rate in effect when the overtime hours began.

At trial, both the employees' and Buffalo Wild Wings' experts testified the workers received greater overtime pay under the rate-in-effect method than they would have received under the weighted-average method.