Bonuses

Payroll procedures for handling bonuses are affected by the FLSA (Fair Labor Standards Act). While such bonuses can increase morale, provide incentive to work harder, and entice strong applicants to join a company, improper treatment of employee bonuses can lead to FLSA violations.  Payroll management questions arise about whether bonuses are included in non-exempts' regular rates of pay; how bonuses affect overtime pay; and whether long-term bonuses must be redistributed over previously-calculated overtime rates.

 

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NEWS/ARTICLES

Employee Recognition Programs Should Use Tax-Free Awards & Fringe Benefits 

Holiday Bonuses: Pass The Bucks...Please 

 

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FAQs

1. Should bonuses be included in non-exempts' regular rates of pay? 
   
   
2. How do bonuses affect overtime pay?
   
   
3. How should quarterly bonuses be included in the regular rate calculation for overtime?