Earning Bonuses as a Paralegal – The Discretionary Bonus and Overtime Pay

Successful legal cases are often the result of a good paralegal working diligently in the background. In virtually all fields of law, paralegals are responsible for analyzing information, performing research, and helping to assist the lawyers in handling their cases.

This can mean that at any given time, a paralegal may be interviewing clients, obtaining medical records and affidavits, gathering witness statements, preparing briefs, drafting pleadings and motions, or helping the attorney with trial, among other things.

After all of the hard work put in to help the lawyers bring justice for their clients, one would hope that fair compensation for paralegals would follow.

Unfortunately, this doesn’t always happen, which is why we started this website—to inform diligent employees like paralegals of their rights under the Fair Labor Standards Act, to ensure that their paychecks reflect what is established under federal law.

For example, one topic that often comes up regarding paralegal compensation is that of the bonus and how it factors into calculating the regular rate of pay for overtime.

Typically, bonuses are to be included in the calculation. But in some instances, they can be left out, which is the case with the Discretionary Bonus.

Bonuses can be given for any number of reasons, with the most common one being motivation. But in the case of the Discretionary Bonus, it cannot be used as a form of motivation if the employer wants to exclude it from the regular rate of pay. This means that the employer cannot tell the employee about the bonus nor its amount until right before the bonus is to be given, therefore eliminating the “motivator” for exceptional performance. The bonus should be solely based on the good work that the paralegal has already performed, instead of a tactic to get him or her to perform “better.” It can be based on meeting a goal or the paralegal’s individual performance.

If the bonus is already expected, it must be figured into the regular rate of pay. For example, if the paralegal was already promised the bonus, such as through a written or verbal agreement or contract, it is no longer considered discretionary.

If you are a paralegal who has questions about your bonus and believe that your employer may be miscalculating your pay and overtime, call us. The Houston overtime attorneys at Kennedy Hodges, LLP will provide you with a free copy of their book, The Ten Biggest Mistakes that Can Hurt Your Wage and Overtime Claim, as well as a free consultation and case evaluation. Protect your paycheck and call 888.449.2068 or fill out our online form today.