A recent DOL investigation found that a Tennessee contractor failed to do so, resulting in a payout of about $1.73 million in back wages for 1,666 hourly workers.

Overtime Pay Miscalculation Leads to Seven-Figure Settlement

The Wage and Hour Division recovered the money for workers at The State Group Industrial, a multi-trade contractor at Ford’s electric-vehicle and battery campus.

“The State Group violated federal law when it excluded bonuses from its overtime calculations, averaging more than $1,000 in back wages owed to each employee,” Wage and Hour Division Administrator Andrew Rogers said.

The FLSA violation was narrow but expensive: The contractor paid incentive bonuses but never included them in the regular rate used for overtime, the DOL determined, so overtime pay was short.

HR leaders are heading into 2026 facing shifting workforce expectations, new compliance pressures, and tighter budgets all at once. Reacting to each change as it lands keeps teams in firefighting...

What payroll should do: Audit which bonuses are nondiscretionary and make sure each one is
reflected in the regular rate used to calculate overtime.

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