Alvarado v. Dart Container Corp. of Cal., 2018 WL 1146645 (Cal. S. Ct. 2018)

Hector Alvarado, who worked as a warehouse associate for Dart, is a member of a putative class of employees who, in addition to their normal hourly wages, received a $15 per day attendance bonus if they were scheduled to work on a Saturday or Sunday and did so, completing their full work shift. According to the California Supreme Court, the question presented is “whether the bonus is treated as if it were earned throughout the entire pay period (including any overtime hours), or whether the bonus is treated as if it were earned throughout only the nonovertime hours of the pay period.” The Court noted that the enforcement policy of the California Division of Labor Standards Enforcement (“DLSE”) has expressly resolved this question in favor of plaintiff’s interpretation, but also concluded that that policy is a “void underground regulation.” Notwithstanding that determination, the Supreme Court held (consistent with the DLSE’s policy and contrary to federal law) that the divisor for purposes of calculating the per-hour value of the attendance bonus should be the number of nonovertime hours actually worked in the relevant pay period, not the number of nonovertime hours that exist in the pay period. The Supreme Court further held that its ruling should be applied retroactively, not just prospectively.