Michigan Court Denies Fiat Chrysler’s Motion to Dismiss Claims that Company Failed to Include Shift Differentials and Bonuses in Workers’ Overtime Pay

On Friday, March 29, 2024, a federal court in Michigan denied Fiat Chrysler’s motion to dismiss a lawsuit alleging that the company failed to properly calculate workers’ overtime pay.  

Specifically, assembly workers, welder repair workers, and stock workers, among others, allege that Fiat Chrysler paid them a base hourly rate, such as about $15 per hour, but failed to include shift differential pay and/or non-discretionary bonuses (including performance-based bonuses) in calculating their overtime rates.  

Shift differential pay is “compensation at a higher wage or rate because of undesirable hours, or disagreeable work.”  For example, Fiat Chrysler’s workers earned shift differential pay for a “second” or “third” shift at Fiat Chrysler.  A second shift was any shift regularly starting on or after 11:00 a.m. but before 7:00 p.m. while a third shift was any shift regularly starting on or after 7:00 p.m. but before 4:00 a.m.  

The lawsuit alleges that, in any given workweek, Fiat Chrysler should have added the total compensation a worker received for a base hourly rate (e.g., $15), shift differential pay, and non-discretionary bonus together, and then divided that figure by the total number of hours worked to determine a “regular rate” of pay.  Then Fiat Chrysler should have paid overtime of one and half times this regular rate for all hours over forty (40) per workweek.  

Instead, according to the lawsuit, Fiat Chrysler only paid one and half times the base hourly rate (e.g., $15) for hours worked over forty (40) per workweek, among other violations. 

This lawsuit shows that employees should closely review how their overtime pay is calculated, as overtime may be owed for compensation that is separate from a salary or an hourly rate, like the shift differentials or bonuses mentioned here.