A landmark overtime lawsuit was recently settled in San Diego, awarding 2,000 city employees compensation for missed overtime pay over three years. The City Council unanimously approved the $6.2 million settlement to pay out to blue-collar workers, police officers and lifeguards.

The settlement stems from a change in the way California cities calculate overtime payment. The payouts cover wages owed due to the new calculations.

Better compensation for workers

The change in overtime calculation takes into account the way Californians receive health coverage through an employer. California uses a “cash in lieu” of benefits plan that adds monthly funds to one’s paycheck to help cover any health care costs. Previously, overtime rates did not take into account these cash payments, but a federal ruling in 2017 changed the official calculations for overtime. Now, overtime must include estimates on “cash in lieu” payments.

The ruling also required affected cities to award three years’ worth of back pay to city employees. Most cities made these employees whole immediately, but San Diego neglected to comply, necessitating the lawsuit. Anticipating the settlement, the City of San Diego has been setting money aside for the payout ever since.

Considering the recent pandemic, setting aside this money was very fortuitous. The important payout owed to California workers will not adversely impact San Diego’s financial flexibility during the medical crisis while also providing economic relief to people in need.

Firefighters were not a part of this suit. Considering the unique hours firefighters work, they are waiting on a second lawsuit to resolve.

Fight for worker protections

Cases like this highlight the importance of fighting for worker protections. Without the lawsuit, these city employees may have never received restitution for back pay owed to them. Any working Californians with questions about the legal rights of workers or overtime pay may find answers with a local attorney familiar with California employment law.