Ally Financial Services—based in Detroit, Michigan—has paid a total of $198,311 to 1,287 employees after an investigation by the U.S. Department of Labor’s Wage and Hour Division (WHD) found the employer failed to calculate overtime pay correctly for hourly employees who also earned a production bonus.
These errors resulted in overtime violations of the Fair Labor Standards Act (FLSA).
WHD investigators found the systematic violations occurred at the employer’s locations across the nation.
The violations also applied to home-based employees.
The law requires that production bonuses be included in the rate upon which employers calculate time and one-half when employees work more than 40 hours per week. Calculating overtime based on hourly rates alone, excluding these production bonuses, yields rates lower than those required by law.
“As a result of the U.S. Department of Labor’s Wage and Hour Division investigation, Ally Financial Services identified an error in calculating overtime in its system,” said Wage and Hour District Director Timolin Mitchell, in Detroit. Michigan. “Ally Financial Services made the necessary correction enterprise-wide immediately to ensure pay is now being processed correctly.”
WHD provides a wide variety of compliance assistance tools to help employers understand their responsibilities and employees understand their rights.
For more information about the FLSA and other laws enforced by WHD, contact the Division’s toll-free helpline at 866-4US-WAGE (487-9243). Employers who discover overtime or minimum wage violations may self-report and resolve those violations without litigation through the PAID program. Information is also available at http://www.dol.gov/whd including a search tool to use if you think you may be owed back wages collected by the Division.