Many employers pay workers bonuses and incentive compensation, but do not include this pay when calculating their employees’ overtime wages. While this is sometimes legal, certain types of bonuses, called “nondiscretionary” bonuses, must be included when calculating a worker’s overtime pay.
Nondiscretionary bonuses are bonuses that are announced to employees to encourage attendance, efficiency, speed or other increased performance. Examples of nondiscretionary bonuses and other types of incentive payments that typically must be included in calculating an employee’s overtime pay are attendance bonuses, performance bonuses, retention bonuses, supplemental shift bonuses, and shift differentials.
Many employers fail to include nondiscretionary bonuses in overtime pay calculations for their employees or even use bonuses to disguise other overtime pay violations.
Does your employer pay you a bonus or shift differential that you believe is not included in your overtime pay? Call us for a free and confidential consultation.
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