With the new Fair Labor Standards Act (FLSA) guidelines set to come out January 1, 2017, many employees and employers have questions about how this will affect their take home pay and whether they’ll be entitled to overtime pay. Pursuant to the amended guidelines, the new salary level threshold has been increased from $455/week to $913/week. This means that many employees that earn more than $455 but less than $913 should be reclassified from exempt to non-exempt, thus entitling them to bring home overtime pay. Overtime pay is typically calculated by multiplying a workers standard rate of pay by 1 and ½ times, and is provided for all time worked in excess of 40 hours in any one workweek.
However, many wonder how bonuses affect that calculation. In certain circumstances, employers may be able to count non-discretionary bonuses and commissions toward the salary basis to determine whether the employees should be considered exempt or nonexempt. This may be the case where these bonuses are paid on a regular basis – quarterly or more frequent. These payments are limited to 10% of the salary threshold. On the other hand, discretionary bonuses – those that are determined at the sole discretion of the employer – may not be included in determining an employee’s standard rate.
For more information or if you have questions concerning whether you should be receiving overtime pay, contact the experienced Atlanta wage and hour lawyers at Buckley Beal, LLP for an immediate consultation.