Is a Christmas Bonus Part of a Salary?

The Department of Labor releases commonly asked questions and answers on the new federal overtime regulations.

As reported by ADP’s Research Institute,

Subsequent to the release of the final regulations the [Department of Labor] DOL held a number of webinars to address concerns regarding the new overtime rules. From these sessions, the DOL has created 115 frequently asked questions (FAQs) designed to provide more clarity to the upcoming December 1 effective changes.

Here is one question, as published by ADP:

Q. Can an employer say that an Xmas bonus is part of your salary in effort to meet the new standard?

A. When the Final Rule takes effect on December 1, 2016, employers will newly be allowed to satisfy up to 10 percent of the standard salary level with nondiscretionary bonuses and incentive payments (including commissions). Nondiscretionary bonuses and incentive payments are forms of compensation promised to employees, for example, to induce them to work more efficiently or to remain with the company. By contrast, discretionary bonuses are those for which the decision to award the bonus and the payment amount is at the employer’s sole discretion and not in accordance with any preannounced standards. An unannounced holiday bonus would qualify as a discretionary bonus, because the bonus is entirely at the discretion of the employer, and therefore could not satisfy any portion of the $913 standard salary level.

Read a sampling of the Department of Labor’s FAQs on ADP’s website or read the complete list of 155 FAQs from the Department of Labor.

For additional background on the regulations and how they effect county governments, see Conduit Street‘s previous posts,

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