On March 5, 2018, the California Supreme Court issued its decision in Alvarado v. Dart Container Corp. of California, 2018 WL 1146645. The Court's discussion of the proper means of calculating an employee's "regular rate of pay" has raised questions among employers regarding the decision's effect on the regular rate of pay used in piece-rate or hourly-plus production bonus structures. This article provides a brief summary of the Alvarado case, discusses its limited holdings, and analyzes the impact, if any, it has on piece-rate or hourly-plus-production pay structures.
In short, the case has no present impact on either piece-rate or hourly-plus-production compensation structures. Instead, the Court went out of its way to exclude these non-hourly payments from its holding, which was limited to flat-sum bonuses alone.
