Court Holds that Health Reimbursement Account Payments Must Be Included in Overtime Calculation

Yingtao Ho

Earlier this week, in a case where Yingtao Ho of the Previant Law Firm represents the Plaintiffs, Judge Randa of the Eastern District of Wisconsin held in Gilbertson et al. v. City of Sheboygan (Case No. 15CV139) that when the employer pays an employee’s health related expenses through a health reimbursement account, the payments must be included in computing the employee’s overtime pay. For example, if an employee whose hourly rate is $20 per hour works 50 hours during a week, and received $100 from a health reimbursement account, then the employee is entitled to receive $33 per hour of overtime worked. An employee who is paid at $30 per hour (1.5 times his base rate of $20 per hour) has been underpaid by $30 for the week. The Judge also ruled that payments for attaining a college degree, as well as bonus payments for opting out of the employer’s health insurance program must also be included in the overtime computation.

If you are an employee who both receives overtime pay and receives medical expense reimbursements through a health reimbursement account, then your employer has likely underpaid you overtime pay by excluding the health reimbursement account payments from the overtime computation. You should contact Attorney Yingtao Ho at (414) 240-1185 to discuss whether you have a case against your current or former employer.