TOTAL COMPENSATION FOR WORKWEEK
(except any statutory exclusions)
TOTAL NUMBER OF HOURS ACTUALLY WORKED IN WORKWEEK
REGULAR HOURLY RATE OF PAY
- Commissions: Commissions earned based on a set, non-discretionary commission arrangement must be included.
- Non-Cash Payments: For compensation not in the form of cash, the employer must compute and include the fair market value of the non-cash compensation in the regular rate of pay calculation.
- Non-Discretionary Bonuses: Non-discretionary bonuses must, as a general rule, be included in calculating the regular rate of pay. This could include, for example, set production, good attendance, and other similar bonuses. These bonuses must be attributed to the period of time in which they were earned in order to recalculate the regular rate of pay for those periods and, if needed, pay any additional overtime pay that is due.
- Discretionary bonuses, e.g. any bonus not required by a binding agreement or plan. Employers should be aware, however, that even in the absence of a written bonus plan or agreement, a longstanding, standard practice of always paying bonuses in a certain way may, depending on the circumstances, create an obligation to include bonus income in the regular rate of pay calculation;
- Gifts or gratuities;
- Tuition or loan forgiveness programs;
- Vacation, sick leave and holiday pay;
- Profit-sharing, pension and welfare payments; and
- Certain overtime premium payments, including payment for hours worked in excess of agreed company standards.
Dorraine Larison concentrates her practice in the areas of bankruptcy law, debtor/creditor law, and employment law. She has extensive experience in the areas of commercial financing, creditors’ rights, and creditor ...
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