Longevity Bonus

Shari Turner

Hi Ya'll
My organization has several employees that have been with the company 15 years
we are getting to the point where we have to put a cap on hourly wages. We
were thinking about giving a bonus for longevity in lieu of an hourly increase.
Can we just give a flat bonus or would this be bouus be susceptible to overtime hours. We are going to give employees with less than 15 years the set hourly
increase. Any help would be appreciated.

sonny

Our employees who are topped out receive 1 or 2% of their salary (base) O.T. is not included and it is a one time check. . not incorporated into hourly rate. The 1 or 2 % is determined by the score on their annual performance evaluation

jimlegal

Agree with Sonny, sounds like a interesting idea!

Margaret Morford

The only down side to doing this is that if they leave you the day after they receive the bonus, you've given them their whole raise for the year in one lump sum with no way to recapture it.

One other thing to consider, if raises are given at the same time every year, this will make for a huge pay out in one month of your financials. If you are going to do this, you might consider paying the longevity bonus on each person's anniversary date to spread the liability out on your financials throughout the year.

Margaret Morford
theHRedge
615-371-8200
[email]mmorford@mleesmith.com[/email]
[url]http://www.thehredge.net[/url]

Hunter1

In answer to the question that I think you posed: If this is not a purely discretionary bonus, like a Christmas bonus, I believe it has to be included in their 'regular' rate for OT calculation purposes.

SMace

You get around having to include the bonus for OT calculation by paying based on the percentage of gross wages. When you do that OT is already included.