About EPEP StoreEP BrandsSupportCommunityNews & Info
Legal & Compliance Home

Rate-In-Effect Permitted As Alternative to Weighted Average For Overtime with Multi-Pay Rates

The California appellate court in Levanoff v. Dragas upheld the employer’s use of rate-in-effect, citing that the practice did not lead to systematic shortage of pay compared to weighted average, and, in fact, led to higher pay than weighted average would have.
August 9, 2021
Rate-In-Effect Permitted As Alternative to Weighted Average For Overtime with Multi-Pay Rates

Rate-In-Effect Permitted As Alternative to Weighted Average For Overtime with Multi-Pay Rates

Though federal wage & hour law has long allowed employers under specified conditions (e.g., rates agreed to up front and equaling at least minimum wage) to pay overtime at the rate in effect when the overtime work was performed to employees performing jobs at two or more different pay rates, the California Labor Commissioner has historically only allowed employers to use the weighted average method to pay overtime in this circumstance (notwithstanding a limited exception for public works employees). But, the California appellate court in Levanoff v. Dragas recently rejected the class plaintiff’s use of the California Labor Commissioner enforcement position of weighted average-only to pay overtime for work at different pay rates. Instead, it upheld the employer’s use of rate-in-effect, citing that the practice did not lead to systematic shortage of pay compared to weighted average, and, in fact, led to higher pay than weighted average would have. Hence, employers seeking to use rate-in-effect instead of weighted average need be cautioned that it is not being utilized to depress wages (e.g., manipulating work schedule to have all OT work performed at the lower rate), as this was not the court’s intent, and it could be subject to recalculation at weighted average.

Related Content

California Supreme Court Surprises Employers on Penalty Rate Used for Meal and Rest Break Violations

California Supreme Court Surprises Employers on Penalty Rate Used for Meal and Rest Break Violations

8/9/2021
In mid-July, the California Supreme Court issued a long-awaited decision concerning the correct payrate...

PayTalk: The Recipe for a Successful Payroll 2022 (Part One)

1/13/2022
Davida Lara joins the PayTalk podcast to share strategies for leading successful teams
New York State Makes Retirement Savings Program Mandatory Through Payroll Deduction

New York State Makes Retirement Savings Program Mandatory Through Payroll Deduction

12/21/2021
New York state employers that do not offer a qualified retirement plan will soon be required to...
2022 Budgeting-sq

Budgeting for 2022: A Production Accountant's Guide

12/15/2021
EP's Payroll Tax, Production Incentives, and Business Development experts explain how inflation,...

Film Commission Report Highlights Covid Costs as Production Ramps Up

12/6/2021
Covid-compliance measures impact production budgets, estimating $90 million or more
EP BLOG_Payroll_Cleanup_Becky_Harshberger_sq

Everything You Need to Know About End-of-Year Production Payroll Cleanup

11/30/2021
Reconciling payroll errors and generating accurate W-2s can be a tedious process. These proactive steps...

Meet the Paymasters

9/9/2021
The hard-working payroll professionals behind Hollywood's paychecks
Canadian flag

5 Things to Know Before Working in Canada

8/31/2021
Prepare for your next job in Canada with this checklist of payroll considerations
Topic: Canada
More

‘No Straight Lines’ & ‘Firstness’ Among Top Winners At Outfest Los Angeles LGBTQ Film Festival – Complete Winners List

8/24/2021
Outfest has announced the award winners of its 2021 Outfest Los Angeles LGBTQ Film Festival.
 Adjusting the W4-Becky Harshberger-Sq

How to Adjust Your Tax Withholdings Using the New W-4

8/17/2021
Making small adjustments throughout the year can save production workers big at tax time!
Los Angeles County Revised Health Order Eases Most COVID-19 Restrictions, Reinstates Masking Requirements

Los Angeles County Revised Health Order Eases Most COVID-19 Restrictions, Reinstates Masking Requirements

8/9/2021
Of note, the June 2021 Order (1) required unvaccinated or partially vaccinated individuals to wear a mask...
Cal/OSHA Updates Standards to Protect Workers from COVID-19

Cal/OSHA Updates Standards to Protect Workers from COVID-19

7/15/2021
Effective June 17, 2021, Cal/OSHA revised its Emergency Temporary Standards (ETS), which now accounts for...

Global Expansion and the Strategic Partnership With Payroll

7/1/2021
Payroll Operations and Data Considerations when Making Strategic Growth Decisions

Getting a New Start

6/1/2021
Davida Lara shares tips on transitioning into your next role

Global Payroll Titan Award 2021

4/29/2021
Davida Lara, CPP, named this year's Global Payroll Titan
California Revives COVID-19 Supplemental Paid Sick Leave for California Workers

California Revives COVID-19 Supplemental Paid Sick Leave for California Workers

4/8/2021
On March 19, 2021, Governor Newsom of California signed into law Senate Bill 95 which revives the...

Winning Payroll Solutions Start with the Right Team

4/1/2021
Davida Lara on why the people who make up a payroll team are critical to delivering results

Entertainment Partners Introduces Wage Data Reporting Solution

3/26/2021
EP offers new service to help employers prepare their SB 973 reporting
The DFEH Offers Further Guidance on SB 973 Reporting

The DFEH Offers Further Guidance on SB 973 Reporting

3/16/2021
In February 2021, the Department of Fair Employment and Housing (DFEH) issued more detailed guidance for...
Pantea Ahmadi and Joe Scudiero

SB 973's Impact on the Entertainment Industry

3/15/2021
How California’s new pay data reporting legislation, SB 973, applys to the entertainment industry
Topic: Legal
Watch
Rounding Prohibited for California Non-Union Meal Breaks and Penalties

Rounding Prohibited for California Non-Union Meal Breaks and Penalties

3/10/2021
On February 25, 2021, the California Supreme Court ruled in Donohue v. AMN Services, LLC that rounding is...

Diversity and Pay Reporting in California

3/6/2021
Your guide to understanding SB 973 and its application to the entertainment industry

SB 973, California Pay Data Reporting Law FAQs

3/6/2021
The new pay data reporting law and its impact on the entertainment industry

Spotlight: Davida Lara, Executive Vice President, Payroll Services

2/18/2021
Meet the dynamic leader who challenges what it means to be in payroll

Digital Production Studio

Production Finance StudioProduction Management StudioEnterprise Management Hub

EP Sites

Central CastingEntertainment PartnersEP StoreSyncOnSetThe Production CommunityWe Got POP
Subscribe now

Be an industry insider with EP's
newsletters and alerts

LegalPrivacy NoticeSecurity
© 2022 Entertainment Partners. All rights reserved.