Labor & Employment Law Daily Wrap Up, STATE-LAW CLAIMS—E.D. Pa.: Employee successfully argued for 1.5 times hourly rate on supplemental bonus, (Dec 9, 2025)

By Ronald Miller, J.D.

The PMWA did not directly answer the question, and no regulations issued by the Pennsylvania Department of Labor and Industry specifically addressed the pay structure at issue.

Confronted by a question of first impression, a federal district court in Pennsylvania held that to calculate the rate of overtime pay when an employee who earns hourly wage also earns a flat rate bonus, the Pennsylvania Minimum Wage Act (PMWA) requires payment of overtime at 1.5 times the regular rate, and getting to that 1.5 times for the flat rate bonus requires a 1.5 premium multiplier. Here, the court determined that the employee’s analysis better reflected Pennsylvania’s approach to such cases. Accordingly, the employer was denied its motion to dismiss the employee’s claim brought under PMWA (Macklin v. American Oncologic Hospital, Inc. dba Fox Chase Cancer Center, No. 24-2215 (E.D. Pa. Dec. 4, 2025)).

The employee worked as an orderly at the employer’s hospital, receiving hourly pay and in some instances a flat rate bonus. Specifically, he earned $17.53 per hour, a shift differential of $2.1036 per hour for overnight work, and a bonus of $100 when he worked a shift of twelve hours or longer.

Overtime calculation. According to the employee, he was underpaid the overtime due on the bonus by dividing the $100 by all hours worked to find an hourly rate, then multiplying that rate by 0.5 to determine his extra pay per overtime hour. Instead, he contends, for each overtime hour he should have received 1.5 times the hourly rate on the supplemental bonus. The employee sought to recover the difference between the 0.5 multiplier and the 1.5 multiplier for himself and a putative class of other workers who have been subject to the same pay policies. For its part, the employer contended that it was correct to multiply the hourly rate on the $100 bonus by 0.5 to calculate the employee’s extra pay, because his approach amounts to double counting.

PMWA requirements. The PMWA requires all covered workers to be paid overtime for every hour over 40 they work in a workweek. That overtime pay must be at least “one and one-half times the employe[e]’s regular rate as prescribed in regulations promulgated by the secretary” of the Pennsylvania Department of Labor and Industry (DLI).

DLI’s regulations explain how to calculate a worker’s overtime payments: by translating a worker’s pay into an hourly rate, then making sure the overtime pay comes out to 1.5 times that regular rate for every hour of overtime work. “The regular rate at which an employee is employed shall be deemed to include all remuneration for employment paid to or on behalf of the employee,” with certain exceptions. This means combining all relevant pay together and dividing by all the hours worked in the workweek, giving the “regular rate” of money earned per hour worked.

Flat rate bonus. In some cases, courts interpreting the PMWA have required a heightened premium multiplier of 1.5 on flat rate salaries, in effect paying 1.5 times the regular rate for each overtime hour on top of the existing pay. For the flat rate bonus in this case, the employee seeks such a heightened multiplier, that is a “1.5 premium multiplier,” keeping the focus on the amount of extra payment due per hour. For its part, the employer favors a “0.5 premium multiplier.”

Overtime rate. The correct calculation of the overtime rate depends on whether it was appropriate for the employer to combine the bonus into the employee’s combined regular rate and then calculate the total overtime using a 0.5 multiplier, or whether the 1.5 multiplier must be separately applied to the employee’s bonus to reach the statutorily required 1.5 total overtime rate.

Employer’s formula. The employer argued that it followed DLI’s regulations when calculating the employee’s overtime: first, it combined all his pay, including the bonus, and divided it by all hours worked to find his regular rate; second, it multiplied that regular rate by 1.5 to determine the total compensation (regular rate plus premium) that it owed the employee for his overtime hours; third, it paid a 0.5 premium for each overtime hour, assuming that “1.0 of the 1.5 multiplier already has been incorporated into the ‘straight time’ calculation.” The employer’s position depends on the premise that the employee was properly classified as an hourly employee.

Employee’s formula. The employee contended that the reasoning in the Pennsylvania Supreme Court’s decision in Chevalier v. General Nutrition Centers¸ 220 A.3d 1038 (Pa. 2019), applies with equal force to all forms of non-hourly compensation, including the flat-rate bonuses at issue here. Thus, he argued that where competing interpretations of an ambiguous portion of the PMWA result in different multipliers, the higher paying one is likely closer to the PMWA’s public policy goal of raising wages.

Question of first impression. As an initial matter, the court pointed out that this case raises a question of first impression addressing how to calculate overtime for a worker paid in the same workweek with both hourly and non-hourly pay under the PMWA. This question poses a challenge because Pennsylvania’s Secretaries of Labor and Industry have provided very limited guidance as to how to convert the generic overtime compensation formula to other compensation methods.

PMWA requires 1.5 multiplier on flat rate bonus. Here, the court determined that considering the PMWA’s structure, history, and what limited administrative guidance exists, the employee’s proposed 1.5 multiplier is more consistent with the PMWA’s public policy.

First, the structure of the PMWA itself is not decisive, but DLI’s administrative interpretation and the principle of reading related statutory sections together weigh toward applying a 1.5 premium multiplier. In Chevalier, the Pennsylvania Supreme Court found it persuasive that DLI had adopted some federal regulations verbatim, but not the regulations that provided for the overtime formula the defendants there sought. Specifically, the court noted that DLI had adopted one overtime structure for fixed payments and required a 1.5 multiplier on the regular rate in that pay system but had not adopted a corresponding federal guideline that permitted a 0.5 multiplier.

Pennsylvania adopted PMWA’s regular rate rules in 1977, copying one federal rule, the day rate rule, verbatim, but did not adopt any others. Courts have interpreted this selective copying as DLI setting aside the federal rules it did not adopt. DLI’s 2022 Final Rule, written in direct response to the Supreme Court of Pennsylvania’s Chevalier opinion confirms that the Day Rate Rule’s 0.5 premium multiplier is an “outlier” because “it is the only subsection to use a 0.5 multiplier than a 1.5 multiplier on overtime hours.” Thus, the court found no way to exclude the flat rate bonus here from the 1.5 premium multiplier that the Pennsylvania Supreme Court and DLI have said is the default.

The case is No. 24-2215.

Judge: McHugh, G.

Attorneys: Matthew D. Miller (Swartz Swidler) for Syeed Macklin. Gerald L. Maatman, Jr. (Duane Morris) for American Oncologic Hospital dba Fox Chase Cancer Center.

Companies: American Oncologic Hospital, Inc. dba Fox Chase Cancer Center

Cases: StateLawClaims WageHour Overtime ClassActions StateRegulations PennsylvaniaNews