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... ) Paying a bonus triggers additional overtime payments and (2 ) the method for calculating the amount of this bonus overtime depends on whether the bonus is characterized as a "non-discretionary" bonus or a "discretionary" bonus. Calculating bonus overtime is a complex process that can be a headache for employers. However, employers who ignore this calculation do so at their own peril because using mistaken formula creates fertile ground for a class action or other litigation. Don Phin, JD, CPCM is president of HR That Works, Inc., a firm specializing in management, employment law, and risk management. He serves as the Human Relations Key Consultant for IMMS.com. You can reach Phin, a past president of the American Academy of Employment Law Attorneys, at (800) 234-3304; e-mail [ ... the week in which he worked 10 hours of overtime. This is known as the retroactive effect of a "non-discretionary" bonus. In contrast, the retroactive effect of a "discretionary" bonus creates a different outcome. Suppose the same employer paid the same $100 per week for the performance bonus based on that particular employee's volume of production during the year (e.g., making sales, manufacturing products, etc.) . The law now requires calculating the bonus overtime differently. Instead of dividing the $100 by 40 straight time hours to determine the "regular rate" for bonus overtime, the employer can divide the amount by the total of the straight time and overtime hours worked (in this case, 50 hours) . As a result, the employee's regular rate for the ...

... ) Paying a bonus triggers additional overtime payments and (2 ) the method for calculating the amount of this bonus overtime depends on whether the bonus is characterized as a "non-discretionary" bonus or a "discretionary" bonus. Calculating bonus overtime is a complex process that can be a headache for employers. However, employers who ignore this calculation do so at their own peril because using mistaken formula creates fertile ground for a class action or other litigation. Don Phin, JD, CPCM is president of HR That Works, Inc., a firm specializing in management, employment law, and risk management. He serves as the Human Relations Key Consultant for IMMS.com. You can reach Phin, a past president of the American Academy of Employment Law Attorneys, at (800) 234-3304; e-mail [ ... the week in which he worked 10 hours of overtime. This is known as the retroactive effect of a "non-discretionary" bonus. In contrast, the retroactive effect of a "discretionary" bonus creates a different outcome. Suppose the same employer paid the same $100 per week for the performance bonus based on that particular employee's volume of production during the year (e.g., making sales, manufacturing products, etc.) . The law now requires calculating the bonus overtime differently. Instead of dividing the $100 by 40 straight time hours to determine the "regular rate" for bonus overtime, the employer can divide the amount by the total of the straight time and overtime hours worked (in this case, 50 hours) . As a result, the employee's regular rate for the ...