Employee Recognition program (cash reward) and FLSA
Pricehcs
128 Posts
I'm interested in the group's experience of applying FLSA consideration to non-exempt employees included in an employee recognition program.
"Many employers have a practice of paying their employees some type of bonus at the end of each calendar year. The Fair Labor Standards Act (FLSA) sets forth specific guidelines on the treatment of such bonuses when calculating amounts of overtime pay due in a pay period. Depending on the type of bonus paid, an employer may unknowingly expose itself to overtime pay liability. Failure to include bonus payments when calculating overtime pay due to an employee is a common FLSA violation, particularly when it occurs at the end of the calendar year. The FLSA mandates that non-exempt employees working over forty hours in a workweek must be paid at least one and one-half times their regular rate of pay for all overtime hours worked. In the FLSA, the phrase "regular rate" means "all remuneration for employment paid to, on behalf of, the employee." Simply put, a non-exempt employee's regular rate equals total remuneration divided by hours worked. When calculating an employee's total remuneration for a particular workweek, employers must include most bonus payments. Inclusion of bonuses when calculating the regular rate of pay will increase the employee's base rate of pay and therefore increase the amount of the overtime premium paid to the employee."
I understand the principle of this and also understand the "Gift" (I think would apply to us) and "Discretionary" (would not apply to us) exceptions to this rule. I'm looking for a little external validation.
My question is this... How have you treated your employee recognition cash rewards for your non-exempts? Have you applied the gift exclusion or have you included the rewards in cash compensation towards your FLSA overtime calculations?
#1 thing a consultant shouldn't say: "I could tell you the answer right now, but we're committed to a three month project..." #-o
"Many employers have a practice of paying their employees some type of bonus at the end of each calendar year. The Fair Labor Standards Act (FLSA) sets forth specific guidelines on the treatment of such bonuses when calculating amounts of overtime pay due in a pay period. Depending on the type of bonus paid, an employer may unknowingly expose itself to overtime pay liability. Failure to include bonus payments when calculating overtime pay due to an employee is a common FLSA violation, particularly when it occurs at the end of the calendar year. The FLSA mandates that non-exempt employees working over forty hours in a workweek must be paid at least one and one-half times their regular rate of pay for all overtime hours worked. In the FLSA, the phrase "regular rate" means "all remuneration for employment paid to, on behalf of, the employee." Simply put, a non-exempt employee's regular rate equals total remuneration divided by hours worked. When calculating an employee's total remuneration for a particular workweek, employers must include most bonus payments. Inclusion of bonuses when calculating the regular rate of pay will increase the employee's base rate of pay and therefore increase the amount of the overtime premium paid to the employee."
I understand the principle of this and also understand the "Gift" (I think would apply to us) and "Discretionary" (would not apply to us) exceptions to this rule. I'm looking for a little external validation.
My question is this... How have you treated your employee recognition cash rewards for your non-exempts? Have you applied the gift exclusion or have you included the rewards in cash compensation towards your FLSA overtime calculations?
#1 thing a consultant shouldn't say: "I could tell you the answer right now, but we're committed to a three month project..." #-o
