STIHL Southwest Failed to Include Bonuses in Overtime Calculations, Lawsuit Alleges

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STIHL Southwest, Inc. faces a lawsuit in which two plaintiffs, current and former employees, claim the yard and construction equipment distributor has failed to properly calculate hourly workers’ overtime rates.

Alleging violations of the federal Fair Labor Standards Act and Arkansas Minimum Wage Act, the proposed collective action says STIHL Southwest has failed to include nondiscretionary bonuses in employees’ time-and-a-half overtime rate calculations, resulting in an underpayment of wages.

The plaintiffs allege in the suit that they and other non-exempt, hourly-paid workers received nondiscretionary end-of-year bonuses that were calculated based on the company’s annual sales. According to the case, the plaintiffs received a bonus, the amount of which was announced ahead of time, every year.

Although the plaintiffs and other workers regularly put in more than 40 hours per week, they were not paid at proper time-and-a-half overtime rates as a result of STIHL’s failure to include their annual bonuses as part of their regular rates of pay, the lawsuit claims.

Federal labor law requires employers to include “all forms of compensation,” including nondiscretionary bonuses, as part of workers’ regular pay rates for the purposes of calculating time-and-a-half overtime rates, the case says.

According to the lawsuit, STIHL Southwest “knew or showed reckless disregard” for whether its actions violated the FLSA, and owes unpaid overtime premiums to “all hourly-paid employees who earned a bonus in connection with work performed in any week in which they worked over forty hours within the past three years.”

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