Marin

This case concerns the lawfulness of defendant Costco Wholesale Corporation’s formula for computing overtime compensation on semiannual bonuses paid to hourly employees. The trial court determined that defendant’s bonus overtime formula for the class of employees who qualify for the maximum base bonus (plaintiffs) violates California law, and ordered use of a different formula. We conclude that defendant’s formula violates neither California nor federal law, and reverse the judgment with directions to enter judgment for defendant.

L BACKGROUND

A. The Base Bonus

Costco pays a formulaic bonus, based on paid hours, to long-term hourly employees. To be eligible for the bonus, paid in April and October, these employees must (1) have been paid a specified number of hours for continuous service—8,000 hours (approximately four years) for those hired before March 15, 2004, and 9,200 hours (approximately 4.6 years) for those hired after that date; (2) generally be at the top of their pay scale; and (3) have been employed by defendant on April 1 for the April bonus and October 1 for the October bonus. The maximum semiannual base bonus amount is $2,000 for those with less than 10…