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Overtime Implications of Bonus Plans Under the FLSA
Employers often overlook the legal implications under the Fair Labor Standards Act (“FLSA”) of paying bonuses to their “non-exempt” employees. Such payments can (and often do) impact overtime pay calculations, leaving well-intentioned employers facing a FLSA class action simply for trying to provide a form of enhanced compensation to their non-exempt employees in the form of a bonus. This article discusses both the general rule that bonus payments must be included in the “regular rate” calculation for overtime purposes, and the three most common exceptions to this general rule. It also tests your knowledge of these rules.
Calculation of Regular Rate
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