Do You Pay Your Hourly Workers Bonuses? That May Affect Their Overtime Pay
The U.S. Department of Labor issued an interesting opinion letter earlier this month that I encourage employers who pay hourly employees bonuses to read (click here
to do that). The letter is a reminder that bonuses may need to be included as part of an employee’s hourly wage when you are calculating how much overtime pay that employee is due.
The Fair Labor Standards Act
requires employers to pay employees making less than $35,568 a year 1.5 times their hourly rate of pay if they work overtime (more than 40 hours per week). This hourly rate includes non-discretionary bonuses (i.e. bonuses that the employer must pay the employee). It does not include discretionary bonuses (i.e. bonuses that the employer chooses to pay the employee because the employee performed well, the employer had a good year, etc.).
This means that if an employer promises to pay an hourly employee a $3,000 bonus at the end of the year, this bonus must be included as part of the employee’s hourly rate. So if the employee worked 2,000 hours during the year, and makes $10/hr, the employer should not pay the employee $15/hr for overtime work (1.5 * $10/hr). Instead, the employer should consider the employee’s hourly rate to be $11.50 per hour. The $3,000 bonus must be added to the employee’s hourly wage, increasing it by $1.50 per hour ($3,000/2,000=$1.50). The employee’s overtime pay should, therefore, be $17.25 ($11.50*1.5).
Employers who want to avoid any confusion about how much they need to pay their hourly employees, or who just hate math, should include in their personnel policies and employment contracts provisions explaining that any bonuses paid are at the discretion of the employer and that bonuses are not considered part of the employee’s regular pay.
Giving Test Answers to “Wives and Paramours” was not Equal Protection or Due Process Violation
CPD Sgt. Hosea Word took the promotional exam for Lieutenant in 2006 and scored 150th on the promotional list. Unfortunately for him, the Department promoted candidates 1 through 149 during the life of the eligibility list. When he took the promotional test again in 2015, he became suspicious of the integrity of the test when he learned that “wives and paramours” of CPD leadership scored unusually high. For instance, the wife of one member of leadership scored 280th on the previous promotional exam, but as a result of the 2015 testing, she skyrocketed to first on the promotion list.
Certain that test rigging had occurred, Sgt. Word sued the City and CPD
, alleging that CPD leadership snuck early test content to their “wives and paramours” resulting in those test-takers scoring very high on the test and receiving undeserved promotions to his detriment. Word alleged that this violated his constitutionally protected right to due process and equal protection and amounted to sex discrimination, among other claims. The court thought otherwise.
In order to bring a claim of a due process violation, a public employee must show that a right to due process was secured by agreement or law. Here, Sgt. Word claimed that the Illinois Municipal Code secured his right to a promotional test that was free of cheating. He cited the following provision in support of his argument:
…[n]o person or officer shall…willfully or corruptly furnish to any person any special or secret information for the purpose of either improving or injuring prospects or chances of any person so examined, or to be examined, being appointed, employed, or promoted. 65 ILCS 5/10-1-26
Additionally, Sgt. Word alleged that he was treated arbitrarily based on his sex because he was not romantically involved with a member of CPD leadership in violation of his right to equal protection and for the same reason was subject to sex discrimination under state and federal law.
While the court acknowledged that the Municipal Code created a prohibition against engaging in favoritism, it did not create a constitutionally protected interest in the test-taking process itself. Without an identified constitutionally protected property interest, Sgt. Word was unable to sustain a violation of a constitutional right. Along with no identifiable constitutional right to a test process free of favoritism, the court found that he also could not sustain a violation of his right to equal protection or show sex discrimination. The court found that Sgt. Word could not show that he was intentionally treated differently based on his sex
. Noting that favoritism resulting from personal relationships disadvantages all others equally, not a particular sex, the court found that Sgt. Word could not show that he was the subject of sex discrimination because he was male.
Can Police Officers and Firefighters Use Medical Marijuana Off-Duty?
We have discussed how the new recreational marijuana law
allows municipalities to prohibit police officers and firefighters from using recreational marijuana off duty. But what about medical marijuana? Can police officers and firefighters use medical marijuana off-duty?
No. The medical marijuana law explicitly prohibits police officers and firefighters from using medical marijuana at any time, on or off duty. The law states:
“This Act does not permit any person to engage in, and does not prevent the imposition of any civil, criminal, or other penalties for engaging in, the following conduct…The use of medical cannabis by an active duty law enforcement officer, correctional officer, correctional probation officer, or firefighter.” 410 ILCS 130/30(a)(9).
Municipalities do not have to prohibit their police officers and firefighters from using recreational cannabis off duty. So, Illinois law sets up a rather odd situation where a police officer or firefighter can use recreational cannabis off-duty but cannot use medical cannabis off-duty.
One might say that this is a moot point: if a police officer or firefighter needs cannabis for a medical condition, then he or she can go to the dispensary and purchase some cannabis. But actually, it is not. Medical cannabis users receive cannabis cheaper than recreational users since they do not have to pay the same taxes that recreational users must pay. And medical users can grow up to five cannabis plants in their homes.
It will be interesting to see if the General Assembly fixes this anomaly in the law in its Spring legislative session. There will likely be amendments to both the recreational cannabis law and the medical cannabis law, and we will keep you updated on those. Also, if you haven’t done so, contact us
to update your personnel policies so that they are in compliance with the changes to the cannabis laws.
More New Laws for 2020
Last week we identified new laws affecting employers
, including public employers, for 2020. Below are additional new laws impacting the employment relationship effective January 1st:
Organ Donor Protections
(PA 101-0179): Prohibits employers from retaliating against an employee for requesting or obtaining a leave of absence to donate blood, an organ, or bone marrow.
Use of Arrest Record
(PA 101-0565): Amends the Human Rights Act. Clarifies the definition of arrest record to include an arrest not leading to a conviction; a juvenile record; or expunged, sealed or impounded criminal record history. Employers are prohibited by the Act to use an arrest record as the basis of a hiring decision for employment purposes.
(PA 101-0380): Amends the Illinois Education Labor Relations Act. Redefines graduate students as educational employees if their role includes performing pre-professional duties such as teaching assistants or research. This allows graduate students to collectively bargain under the IELRA.
Open Meetings Act Training
(PA 101-0233): Amends the Act to allow officials to take an Open Meetings Act training course with an organization tasked with representing local governments (primarily the Illinois Municipal League).
Illinois Police Training Act
(PA 101-0215): Amends the Act to include mandatory mental health awareness and response course materials included as part of the minimum in-service training requirements for police officers. The curriculum should consist of materials on job-related stress management techniques, skills for recognizing signs and symptoms of work-related cumulative stress, recognition of other issues that may lead to officer suicide, solutions for intervention, and a presentation on available peer support resources.
Payment of Gratuity
(PA 101-0509): Amends the Wage Payment and Collection Act to include all money considered gratuity and tips to be wholly owned by employees. An employer's retention of gratuities is an underpayment of wages in violation of the Act.
Workers' Compensation Coverage Enforcement Amendment
(PA 101-0040): The amendment speeds up the enforcement process of workers' compensation violations. Applicable employers will face a penalty of $10,000 (originally $2,500) if an investigator determines the employer does not have adequate workers' compensation insurance.
Complaints about Directive to Alter Report is not Protected Speech
Earlier this week, the 7th Circuit Court of Appeals found that the employer, City of Chicago, did not violate an employee’s First Amendment right to protected speech when he allegedly spoke out against a directive to include information in a report that, in his opinion, was not accurate.
In the case of Lett v. City of Chicago
, the plaintiff was an investigator for the Civilian Office of Police Accountability, which investigates allegations of police misconduct. According to his complaint, the Chief Administrator, in reviewing one of his case reports, directed him to include a statement that the investigation found that the police officer in question had planted a gun on a shooting victim. Plaintiff claimed that he did not find that statement to be accurate.
Plaintiff alleged that he later complained to the Chief Administrator’s deputy about that directive. He also claimed that when the Chief Administrator learned of his conversation with the deputy, she removed him from his investigator position, assigned him to janitorial duties, opened a disciplinary investigation on him, alleging that by speaking with the deputy he violated confidentiality rules and ultimately fired him.
Plaintiff filed a grievance which ultimately resulted in his reinstatement with back pay, but he alleged in his complaint that upon return to work he was immediately placed on paid administrative leave and not allowed to work. He filed a civil suit, alleging, among other things, that he was punished for exercising his First Amendment right to free speech in sharing his concerns with the deputy about the directive to include a statement in his report about which he did not agree.
The 7th circuit upheld the district court’s dismissal
of his First Amendment rights violation. In order to sustain a claim for violation of First Amendment protected speech, a public employee must show that they were speaking on a topic as a private citizen on a matter of public concern and that the speech in question was not outweighed by the employer’s interest in promoting effective and efficient public service. The 7th circuit agreed that the plaintiff’s remarks were not made as a private citizen as they were about concerns with a directive regarding his work. The court noted that the First Amendment does not empower an employee to “constitutionalize the employee’s speech.” In other words, work complaints, regardless of their validity, are not protected speech.
Sometimes the law, when applied to facts, can make you feel a little uncomfortable. These allegations might be an example of that, but it is also important to remember the old adage that “there are two sides to every story.” The case was decided only on the allegations in the complaint, so their accuracy, as well as other facts perhaps left out of the complaint, are not available. Additionally, the case references the fact that the plaintiff did obtain relief through a grievance procedure; the situation just did not invoke First Amendment protections.