Nondiscretionary Bonuses and Overtime Pay
A bonus is money promised to an employee in addition
to the monthly salary, hourly wage, commission or piece rate usually due as
compensation. Bonuses are in addition to any other remuneration rate and may be
predicated on performance over and above that which is paid for hours worked,
pieces made, or sales completed. A bonus may be in the form of a gratuity where
there is no promise for their payment, for example, a holiday bonus at the end
of the year. Additionally, a bonus may be a contractually required payment
where a promise is made that a bonus will be paid in return for a specific
result, such as exceeding a minimum sales figure or piece quota, or as an
inducement to remain in the employ of the employer for a certain period of
time. In general, an employee who voluntarily quits his or her employment
before the payout date of the bonus is not entitled to receive the bonus.
Certain types of bonuses are included in the regular
rate of pay for calculating overtime. They are known as nondiscretionary
bonuses. Discretionary bonuses or sums paid as gifts at a holiday or other
special occasions, such as a reward for good service, which are not measured by
or dependent upon hours worked, production or efficiency, are not included for
purposes of determining the regular rate of pay. A nondiscretionary bonus that
is based upon hours worked, production and efficiency of the employee will
figure into the hourly rate of pay for purposes of calculating overtime.
For a free consultation with an experienced employee
rights attorney, contact David Spivak:
- Email David@SpivakLaw.com
- Call toll free (877) 277-2950
- Visit The Spivak Law Firm, 16530 Ventura Boulevard Suite 312 Encino, CA 91436
- Fax (310) 499-4739
For further information on your rights in the work
place, please visit our other websites:
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