Overtime pay - include new bonus?
HR inWA
21 Posts
We are working on designing a new bonus plan that is going to be based solely on whether our company hits its financial goals - not on individual performance whatsoever (that will be covered in another plan). My concern is that this bonus is then going to need to be calculated into overtime pay. Does anyone know where I can go to find the exact rules, regulations and how-tos on this?
Comments
Essentailly a "non-discretionary" bonus is any bonus the employer pays that is the result of an agreement, policy, practice, and is expected payable when the requirements are met. If the employer makes any sort of statement that such and such a bonus will be paid for cetain type of performance or when certain level of production or profit is reached then the bonus is considered as non-discretionary.
A "discretionary" bonus is generally one that is considered to be an out and out gift by the employer with no prior commitment for payment. For example, the employer suddenly, on December 20, announces that every employee for Christmas will be a $500 bonus -- no ifs, ands or buts. No previous employee understanding or expectation that such a bonus would be paid existed.
The regulations that address bonuses, the various types, whether they are included in the regular rate of pay and how they are caluclated if they are included can be found at the Code of Federal Regulations, Volume 29, Sections 778.208 through 778.215. Also, take a look at the discussion found in Sections 778.502 and .503.
The link to the regulations is: [url]http://www.access.gpo.gov/nara/cfr/waisidx_02/29cfr778_02.html[/url]
Click on the link and then scroll down to the appropriate sections.