Opinion ID: 1251568
Heading Depth: 1
Heading Rank: 8

Heading: Use of hourly rate of $4 in computing compensable hours from gross pay.

Text: Defendants also complain of the use of the hourly rate of $4 per hour by plaintiffs' auditor in computing the compensable hours for which payments into the various trust funds were required and ask that the case be remanded to the trial court with instructions to use wage rates proposed by them for that purpose. As previously noted, the amount of the contributions payable by defendants to the union trust funds was based upon the number of hours worked by their employees. Defendants, however, had no adequate records of the hours worked by many of their employees, due largely to the fact that many of them were paid on a piecework basis, i.e., at a specified rate per thousand feet of insulation material installed by them. As a result, it was necessary for both plaintiffs' auditor and defendants' auditor to compute the number of compensable hours worked by such employees based upon some other information. Plaintiffs' auditor testified that he asked defendants for the time records of defendants' employees and that upon finding no adequate records of hours worked by many of defendants' employees he discussed the matter with defendant Kelly and was told that for tax purposes defendants used the rate of $4 per hour for employees who worked on a piecework basis and that it was a reasonable figure to use in determining the hours worked by such employees from their gross pay. Plaintiffs' auditor testified that, accordingly, he used that hourly rate for the purpose of computing compensable hours for such employees. That $4 per hour was a reasonable rate to be used for such purposes was supported by the testimony of several employees who had worked on a piecework basis and who said that on such a basis their average earnings were $4 per hour or less, although some averaged more than that. Two such employees testified that after working for some time on a piecework basis they received a raise to a salary computed at a rate of $5 per hour. Defendants contend, on the contrary, that computation of the number of compensable hours of work for piece rate employees from their gross pay by the use of a rate of pay as low as $4 per hour resulted in an inordinately high number of compensable hours of work. Defendants also contend that hourly rates of $6 for such employees and $9 per hour as they became more experienced and worked more rapidly, were more accurate, as used by defendants' auditor in his computations. The use of these higher hourly rates would result in a substantially smaller number of compensable hours upon which pension contributions were payable. There was substantial evidence, however, that employees who worked on a piecework basis did not ordinarily earn as much as $6 per hour, much less $9 per hour. Several of such employees so testified, as previously noted. It also appears that defendants' auditor based his computation on what defendant Kelly told him to be the amount of insulation material that his employees could hang. On that basis a skilled employee earning $9 per hour would earn $360 for a 40-hour week (or $1,440 for a four-week month). None of such employees earned that much and their usual earnings were substantially less than that amount, according to defendants' own audit report. Upon this state of the record we hold that the trial judge did not err in refusing to reject plaintiffs' audit report upon the ground that its computation of compensable hours for piece rate employees was based upon a wage rate of $4 per hour. Substantial evidence supported the use of that rate for that purpose for such employees. As for employees for whom these were known hourly wage rates, plaintiffs' auditor testified that he used the hourly rates of pay provided by defendants in computing the compensable hours for such employees and that when defendants' records, as made available to him, showed actual hours of work he used such hours in his computations. Defendants' proposal that hourly rates for pieceworkers be based upon their work speed would require computations based primarily upon defendant Kelly's subjective judgment. Defendants have been afforded ample opportunity to submit what they consider to be accurate computations for these employees. As for defendants' alternative suggestion that contractual wage rates be used for purposes of computing compensable hours, no evidence was offered to show that these employees were paid at such rates. As for defendants' further suggestion that this case be remanded in order that computations for other insulators may be based upon their known hourly rates, plaintiffs' auditor testified that he used the hourly rates made available to him by defendants for all employees paid at hourly rates. Defendants had ample opportunity, on two separate occasions, to submit computations of compensable hours for such employees based upon what they contend to be their actual hourly rates and have not done so, except as set forth in the report of their auditor, as previously submitted and considered. For all of these reasons, we agree with the decision by the trial judge and the judgment of the trial court is affirmed. Under the circumstances of this case, however, no costs will be allowed to either party.