Non-discretionary bonuses overtime

Non-discretionary bonus can increase the overtime rate

The FLSA requires employers to calculate overtime pay based on the employee’s regular rate of pay. Regular pay can be calculated by dividing all the wages for a work week by the hours worked in that week.

Overtime violations can take place when the employer paid non-discretionary bonuses to their employees, but when it came time to pay those employees for overtime, the bonuses were not included in the employees’ regular rate. The employees were shortchanged for their overtime.

How non-discretionary bonus results in collective or class action overtime lawsuits

If the improper overtime policy is uniform across a company’s national operations, a class or collective action lawsuit can be filed to collect the unpaid wages. Testimony from co-workers, supervisors, or payroll personnel about how non-discretionary bonuses were not included in the overtime pay are usually adequate to support a class or collective action.

What are examples of non-discretionary bonuses

Examples of bonuses for which overtime pay was not compensated in prior lawsuits are listed below:

  • Job completion bonus
  • Day bonuses
  • Quota bonuses
  • Tour Bonuses (or Marketing Bonuses)
  • Move-In Bonuses
  • Resident Referral Bonuses
  • Shift Bonuses
  • Quarterly Net Gain Bonuses, and Quarterly Occupancy Bonuses.

Questions to ask to determine if you have an overtime violation based on non-discretionary bonuses

  • Do you get paid a bonus on top of your paycheck?
  • Is the bonus part of the regular pay?
  • Do you get paid regular wages plus bonuses?
  • When you work overtime do you get time and one half of your hourly rate? Does that change when you get a bonus?

The key point on this issue is whether or not the company’s employees received non-discretionary bonuses were properly accounted for in determining overtime. Every time you get a non-discretionary bonus, your hourly rate and overtime rate for that week must be re-calculated to a higher rate. The overtime law is very clear that the FLSA requires the non-discretionary bonus to be included in the regular rate of pay for overtime purposes. A non-discretionary bonus is not based on a company’s annual profit. A non-discretionary bonus if an employee meets a required wage obligation.