Here’s another example. To at-
tract manufacturing candidates,
you give them a $2,000 bonus after 6
months. This would be a non-discre-
tionary bonus, so it must factor into
the regular hourly rate of pay. Let’s
also say that this is a deferred bonus
that will be paid out over a series of
pay periods.
A retention bonus was earned over 6
months of 26 weeks for a weekly equivalent of
$76.92 ($2000/26 weeks). If the employee worked
OT during the 26-week period, the increase in the
regular rate is calculated by dividing $76.92 by the total hours
worked during the overtime week. If the employee worked 10 hours
of overtime in their 9th week, the employee would be due an addi-
tional $7.70 of overtime.
Wage and hour violations are the number one litigated employ-
ment law topic. Additionally, the Department of Labor was given
extra money as an initiative to crack down violations. They now
target five industries: Manufacturing, Hospitality & Food Services,
Healthcare & Social Assistance and Retail. If you are in one of them,
you are at a higher risk of audit and having to pay fines if you are
not compliant.
Failure to follow these rules can result
in fines and damages, including back
pay for up to three years for unpaid
wages and overtime owed but not
paid, liquidated damages, attorney’s
fees and court costs. In addition,
wage and hour violations can result
in personal liability to the owners and
decision makers who violated the law.
Lastly, most insurance policies do not
pay for any of the damages associated with
violating wage and hour law.
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