An Hourly Employee Bonus

SELWPB · July 2002

I have found that some of my competitors are paying bonuses to their employees without recalulating the overtime hours they have worked. I understand this to be illegal, am I correct?

I am trying to develop a bonus program for our hourly employees, but it seems what ever direction I turn, I run into a legal snag or payroll nightmare.

Most of my employees work over 40 hours and are paid overtime, is it illegal to add 1 or 2 hours to their check each week as a bonus. If the employee worked over 40 hours it would be paid as overtime, if less than 40 hours paid as straight time. Is this legal?

Rockie · July 2002

This is a stab in the dark, but since overtime is specified as hours worked over 40 in a workweek, it would depend on how you specify "bonus". I would not calculate it on the employee's hourly rate. I would set an arbitrary amount for the bonus - such as $25; $50 whatever and designate it as a discretionary bonus. I think this would work - but some of our payroll experts might differ.

Carol CA · July 2002

I'm not a payroll expert either, but it seems to me that if this is a discretionary bonus you are paying above and beyond the call of duty, then you are OK. If you are linking it to hours worked, then you may cause more problems because you are really increasing their base.

I think a basic premise is how do you decide you gets the bonus? Everyone? What are you basing this "reward" on? I agree that flat amounts for a certain level of production would probably be best if production is what you are targeting.

An Hourly Employee Bonus

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