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, 9454 Wilshire Blvd., Ste 303, Beverly Hills, CA 90212
  • Fax (310) 499-4739

For further information on your rights in the work place, please visit our other websites:

Discrimination FightDiscrimination.net
Wrongful termination FightWrongfulTermination.com
Sexual harassment FightSexualHarassment.com
Unpaid wages and overtime MyWorkMyWages.com
Family and medical leave FMLALawyers.com
Pregnancy discrimination PregnancyRights.com
Disability discrimination FightDisabilityDiscrimination.com
Age discrimination FightAgeDiscrimination.com
Employee Rights Blog CaliforniaEmployeeRightsAttorney.
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