As we enter the winter holiday season, many employers begin to contemplate paying year-end bonuses to employees. It is a nice gesture of appreciation for work performed throughout the year and welcomed by employees. However, the payment of bonuses continues to be an area where many employers fail to comply with the Fair Labor Standards Act (“FLSA”). At a recent employment law webinar, the Regional Director for the Wage and Hour Division of the US Department of Labor underscored the ongoing compliance problem with employers failing to calculate the correct overtime rate. The typical problem occurs in the calculation of the “regular rate of pay” for overtime hours worked.
The key issue with “bonuses” — regardless of the time of year when they are awarded — is whether the bonus must be included in the “regular rate” when calculating overtime for non-exempt employees. The Fair Labor Standards Act (“FLSA”) requires that most employers pay non-exempt employees overtime in the amount of “one and one-half times the regular rate at which they are employed” for any hours worked in excess of 40 during a seven day work week. 29 U.S.C. §207(a). In many employment contexts, the regular rate is identical to the employee's hourly rate. However, where employers offer other forms of compensation beyond an hourly rate, such as bonuses, these amounts must generally also be included in the “regular rate” for purposes of calculating the overtime rate. The regular rate is “determined...
BreakingNews Sarma further accused the TMC of allowing cattle smuggling to Bangladesh to continue for vested interests. Published on: Guwahati: Assam Chief Minister Himanta Biswa Sarma on Thursday ...