10th Circuit Seems Wary of Amazon’s Holiday Pay Arguments

A panel of the U.S. Court of Appeals of the Tenth Circuit recently heard oral arguments in a proposed class action lawsuit involving Amazon warehouse workers and the computation of overtime pay. The judges appeared skeptical of Amazon’s arguments against the workers’ claims that their employer wrongfully failed to pay them overtime pay for weeks in which they received holiday incentive pay. The case is Hamilton v. Amazon.com Services, case number 23-1082, U.S. Court of Appeals for the Tenth Circuit.

The warehouse workers sued the behemoth online retailer in February 2022 under Colorado state wage law. A U.S. District Court dismissed their suit, ruling that state law was silent on whether employers had to account for holiday incentive pay in calculating overtime pay benefits. The trial court judge appeared to accept Amazon’s argument that since the state law didn’t address the issue, it could look to the Fair Labor Standards Act (FLSA) for guidance.

On appeal, the workers pointed to a Colorado Department of Labor and Employment regulation interpreting the state’s wage law. That regulation specifies that employers must consider “all compensation” when calculating an employee’s pay. At least one judge on the panel expressed doubt to Amazon’s attorney that “all” could mean anything other than “all,” despite Amazon’s protests to the contrary.

Although one judge expressed concerns that the workers may have forfeited this argument by failing to bring it up before the trial court, where they focused on holiday incentive pay as a shift differential, another judge disagreed. That judge emphasized that the panel would have to consider and apply the language in the regulation, no matter whether the parties addressed it in their arguments.

Yet another judge embraced the workers’ alternative argument of holiday incentive pay as a shift differential. The workers argued that characterizing holiday incentive pay as a shift differential would also make it a factor employers must consider under the state’s wage law in calculating overtime pay. Amazon’s only rebuttal to that argument was that no other court had reached that conclusion.

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