Should bonuses be included when calculating my overtime?
A:
Usually, any bonus given to an employee must be included in the regular rate of pay.
To calculate your correct regular rate of pay, which affects your overtime rate, employers must take into account all work-related payments for both hourly and salaried employees.
Examples of these payments, which must be added to the employee's total wages to determine the correct regular rate of pay, can include:
Bonuses: "Non-discretionary" bonuses, or additional payments that are directly tied to hours worked or to special achievements, must be used to determine the regular rate of pay. Only "non-discretionary" bonuses, like certain types of gifts, may be excluded under FLSA overtime laws.
Incentive Pay: extra compensation for special achievements
Shift Differentials: Employees who work nights, weekends, or holidays are often paid a "shift differential." Employers are required to include this in the regular pay rate, as long as the "differential" is less than 50% of the employee's regular rate of pay.
Longevity Pay: Extra payments related to the length of time an employee has worked at a company.
The Texas overtime lawyers at Kennedy Hodges represent workers nationwide and across Texas in: Houston, Dallas, Austin, San Antonio, Fort Worth, Pasadena, Laredo, Sugar Land, Lubbock, Illinios, New York, Massachusetts, Los Angeles, Chicago, Philadelphia, Phoenix, San Diego, San Jose, Jacksonville, Indianapolis, San Francisco, Columbus, Charlotte, Detroit, and more.
