Mar. 7—On Tuesday, the U.S. Department of Labor announced it recovered $108,000 worth of back wages across all 53 Boomarang Diner locations in Oklahoma.
The U.S. Department of Labor’s Wage and Hour Division found the diner did not include management personnel’s monthly performance bonuses in their regular pay rate, a violation of the Fair Labor Standards Act. Because overtime pay is based off of regular pay rates, the personnel’s overtime pay was improperly calculated.
The bonuses were what the Department of Labor characterizes as non-discretionary bonuses, which, unlike discretionary bonuses, must be included in the base rate of pay.
“When an employee is aware that they can earn a bonus or earn additional money from working harder, working smarter, being more profitable — and they may even be aware of what the percentage or dollar amount might be if they perform in that manner — then that is a non-discretionary bonus,” said Michael Speer, the director of the Oklahoma City branch of the Wage and Hour Division.
Speer said bonuses were given to managers at locations that were particularly profitable or productive, making them non-discretionary. He stressed Boomarang was not acting maliciously.
“Boomarang just made a mistake. This was not something that was intentional. This was not something underhanded by any means,” Speer said. “This is an error that is not uncommon in business, and certainly not in the restaurant industry.”
A representative from Boomarang said the Wage and Hour Division opened their inquiry into the diner last year and the issue was settled six months ago.
“When the Wage and Hour Division contacted us early last year, they believed we had miscalculated the overtime because we had not included the bonus in our base pay calculation for approximately 107 employees (less than 2.5% of the total employees we have in a given year),” a Boomarang representative told The Transcript.
Boomarang believed the bonuses paid to employees were discretionary and therefore did not have to be included in the regular base rate of pay.
“The WHD disagreed. We had the opportunity to contest this matter. However, since the amount requested by the WHD amounted to less than $25 per affected employee per month, we made the decision to err on the side of paying our employees more instead of fighting the WHD’s determination,” the representative said.
Speer said discretionary bonuses are goodwill gestures on the part of the employer, not something employees can routinely expect. He used Christmas bonuses as an example.
“You don’t have any idea you’re going to get a bonus, you don’t know the amount, you don’t know what you can do to earn it,” Speer said.
According to Speer, the wages recouped should have been paid between January 2020 and late December 2021. Boomarang completed its back payments last fall. Speer said it was not a contentious process, but because the error occurred across all 53 locations, there were many “moving parts.”
“We spent weeks working hand in hand with the WHD to make sure that each employee was properly compensated,” Boomarang’s representative said.
The representative also said after the initial inquiry by the WHD, the diner modified base pay calculations to include all bonuses moving forward.
Boomarang paid the Department of Labor $54,423 in back wages and $54,423 in liquidated damages. Employees owed back wages are also eligible to receive damages as stipulated in the Fair Labor Standards Act.
If you think you may be owed back wages, you may call the WHD confidentially at (866) 487-9243.
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