Employee Service Award
stilldazed
640 Posts
My company is reviewing it's service award program and will be making changes. It is fairly generous for a nonprofit and includes savings bonds in $250 increments for recipients for each five years of service ($250 for 5, $500 for 10, $750 for 15, . . ., up to $1,500 for 30; EE series). I'm getting tangled in IRS verbiage and FLSA verbiage. Some of my assistance reports that our company is not including service award values in reg rate of pay for OT calculations. Others report that because the program is for service awards and does not include other employee benefits it is not a qualified plan.
My questions:
1. Is a service award the same as a bonus that depends on employee performance? Thus a service award given on a scheduled award calendar (i.e., 5 years, 10 years, 15 years, . . .) is a nondiscretionary bonus, including in reg rate of pay for nonexempts???
2. What is a qualified plan? (such as in $400 or less per employee per year in a nonqualified plan vs. $1,600 or less per employee per year in a qualified plan)
Anyone please answer or direct me to a source that speaks in layman terms. I'm having trouble understanding everything I'm finding so far and really want to ensure we get to something that serves our corporate purpose, works for our employees, and is consistent with regulatory guidelines.
Thanks,
My questions:
1. Is a service award the same as a bonus that depends on employee performance? Thus a service award given on a scheduled award calendar (i.e., 5 years, 10 years, 15 years, . . .) is a nondiscretionary bonus, including in reg rate of pay for nonexempts???
2. What is a qualified plan? (such as in $400 or less per employee per year in a nonqualified plan vs. $1,600 or less per employee per year in a qualified plan)
Anyone please answer or direct me to a source that speaks in layman terms. I'm having trouble understanding everything I'm finding so far and really want to ensure we get to something that serves our corporate purpose, works for our employees, and is consistent with regulatory guidelines.
Thanks,
