Pittsburg, PA

Tucker Arensberg, P.C.
Tucker Arensberg, P.C.
One PPG Place, Suite 1500
Pittsburgh, PA 15222
(412) 566-1212
(412) 594-5619
Directions to Pittsburgh

Harrisburg, PA

Tucker Arensberg, P.C.
Tucker Arensberg, P.C.
2 Lemoyne Drive, Suite 200
Lemoyne, PA 17043
(717) 234-4121
(717) 232-6802
Directions to Harrisburg

New York, NY

Tucker Arensberg, P.C.
Tucker Arensberg, P.C.
250 Park Avenue, Suite 1508, 7th Floor
New York, NY 10171
(212) 739-7910
(212) 739-9607
Directions to New York

Widget Title

  • People
  • Practice Areas
  • News + Insights
    • News
    • Articles
    • Speaking
  • Office Locations
    • Pittsburgh
    • Harrisburg
    • New York
  • About the Firm
    • Overview
    • Careers
    • Diversity
    • Affiliations
    • Pro Bono & Community

Title

  • Skip to primary navigation
  • Skip to content
  • Skip to primary sidebar

Tucker Arensberg, P.C.Tucker Arensberg, P.C.

Attorneys in Pittsburgh, Harrisburg, New York City

  • People
  • Practice Areas
  • News + Insights
  • About Our Firm
  • COVID 19: Answers to Business Challenges
ShareBookmarkPDF

Non-Discretionary Bonuses and Overtime Pay Calculations

Articles August 25, 2016

More employees than ever may be categorized as non-exempt when the new Department of Labor (“DOL”) salary requirement for exempt employees becomes effective on December 1, 2016.  Many formerly salaried, exempt employees will be changed to non-exempt employees (either hourly or salaried) if their current salary is too far below the new minimum salary requirement.  Given that, employers need to be cognizant of how bonuses earned by employees effects their overtime pay.

Under the law, any bonus that is non-discretionary in both the fact (i.e. the bonus is guaranteed if the employee meets certain qualifications) and in amount (i.e. the amount of bonus is pre-determined, either in dollar amount or as a certain percentage of some number such as sales or revenue) must be included in the employee’s regular rate of pay for overtime purposes.

Thus, an employee who earns a $400 bonus due to the employee or the company meeting some goal or standard, and that $400 was determined in advance of the employee earning it, must have that $400 included in his or her regular hourly rate in order to determine overtime pay.

If the bonus is earned monthly, then the $400 may be divided equally for all weeks worked that month, such that the employee has essentially earned an extra $100 per month each week of the month.

If the employee worked overtime in one of those weeks, and was paid time and a half based on his or her regular weekly wage, the employer will have to go back and figure out what the overtime pay would have been if the $100 was included in regular wage that week, and will then have to pay the difference to the employee.

For questions or additional information contact Scott Leah or 412.594.5551

Primary Sidebar

Related

Topics

  • Labor & Employment

People

  • Scott R. Leah
© 2021 All Rights Reserved|Tucker Arensberg, P.C.|Log in|Powered by Content Pilot
  • Sitemap
  • Disclaimer
  • Privacy Policy
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.Accept