Opinion ID: 2581073
Heading Depth: 2
Heading Rank: 1

Heading: The Overtime Provisions of the MWA Apply to the Retroactive Payment Contained in the CBA Signed by Todd and PSMTC

Text: Whether the MWA applies to retroactive payments contained in collective bargaining agreements is an issue of first impression in Washington. Hisle, 113 Wash.App. at 429, 54 P.3d 687. Consistent with Washington's status as a pioneer for protection of employee rights, Drinkwitz v. Alliant Techsystems, Inc., 140 Wash.2d 291, 300, 996 P.2d 582 (2000), the MWA provides that no employer shall employ any of his employees for a work week longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed. RCW 49.46.130(1). Regular rate is the hourly rate at which the employee is being paid, but may not be less than the established minimum wage rate. WAC 296-128-550. This court found that the legislature intended to allow a broad and flexible interpretation of the term [regular rate] so long as the purposes of the Washington Minimum Wage Act are satisfied. Inniss v. Tandy Corp., 141 Wash.2d 517, 532, 7 P.3d 807 (2000). Although employees and employers may not bargain away these minimum requirements, they are free to bargain collectively in order to establish wages or other conditions of work in excess of the applicable minimum. RCW 49.46.110. Wages are defined as compensation due to an employee by reason of employment. RCW 49.46.010(2). To support their opposing positions, both Todd and Hisle cite Minizza v. Stone Container Corp ., a Fair Labor Standards Act of 1938 (FLSA), 29 U.S.C. §§ 201-219, case. [6] Minizza v. Stone Container Corp. Corrugated Container Div. E. Plant, 842 F.2d 1456 (3rd Cir.1988). Todd argues that Minizza explains that the purpose of the retroactive payment supersedes the manner in which it is calculated. Pet. for Review at 10. Hisle argues that Minizza explains that payments tied to hours worked are subject to overtime requirements. Answer to Pet. for Review at 13. Minizza involved a ratification inducement of two lump sum payments ($750 and $500). Minizza, 842 F.2d at 1458. To be eligible for the first payment, an employee had to have active employee status for three months prior to the payment. Id. To be eligible for the second payment, an employee had to have such status for six months prior to the payment. Id. Because the payments were not tied to hours worked or services rendered, the Minizza court found that the payments were not made as compensation for hours of employment which satisfied the 29 U.S.C. § 207(e)(2) exception. Id. at 1462. Therefore, overtime did not apply. Id. Minizza is not directly on point because it limited itself to its facts, id. at 1463, involved lump sum payments, id. at 1458, and was based on 29 U.S.C. § 207(e)(2), an exception that does not exist in the MWA. Minizza, at 1461. However, Minizza's dictum indicates that the overtime provisions of the MWA do apply to the retroactive payment. Id. at 1460 (This sum can be allocated solely as compensation on an hourly basis (in which event the payment would be fully includable in the `regular rate')), id. at 1462 (If the payments were made as compensation for hours worked or services provided, the payments would have been conditioned on a certain number of hours worked or on an amount of services provided.). Id. We agree with Hisle and find that the retroactive payment contained in the new CBA is tied to hours worked and, therefore, is subject to the overtime provisions of the MWA. We reject Todd's and PSMTC's assertion that the payment was a ratification inducement. The CBA to which they stipulated, and which the arbitrator ordered, makes no indication that the payment is a ratification inducement, lists the hourly retroactive payment increases under the heading Wage and Fringe Increase, and specifically ties the hourly retroactive payment to hours worked. CP at 232. But even if properly characterized as a ratification inducement, under the facts of this case, the retroactive payment is subject to the MWA overtime provisions. We affirm the Court of Appeals determination that the overtime provisions of the MWA apply to the retroactive payment.