What happenedGood Guys Construction Co. pays entry-level carpenters a base rate of $14 per hour. A few of these carpenters have become quite skilled, and when they perform higher-level carpentry, such as trim work, the company pays them an extra $3 per hour. When the company pays them overtime, however, it bases the calculation on the $14-per-hour base rate. Why it’s wrongThe Fair Labor Standards Act (FLSA) states that a non-exempt employee’s regular rate of pay for overtime calculation “includes all remuneration for employment …” (with a few exceptions). This “remuneration” includes incentives or bonuses tied to the employee’s work,...

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