CHRISTMAS IS COMING AND THE GOOSE IS GETTING FAT

Do you know anyone that actually has a goose for Christmas?  Me either.  Turkey, Ham but Goose?  I don’t think so, not any more.  Probably, in this economic crisis not many people are getting a bonus for Christmas either.  If you are giving a bonus this year there are some things you need to know about how some bonuses might affect how you pay overtime to non-exempt employees.  That’s right, certain bonuses must be included in the computation of the regular rate for non-exempt employees that will effect how much overtime these employees are entitled to receive.  These kinds of bonuses include, Production bonuses, Attendance Bonuses and Cost-of-Living Bonuses.  On the other hand, the regulations implementing the Fair Labor Standards Act also state that certain types of bonuses can be excluded from the regular rate.  So, what are the kinds of bonus payments that can be excluded?  Well, they include Discretionary Bonuses, Gifts and Payments in the nature of gifts on special occasions (like Christmas bonuses), Profit Sharing, Thrift and Savings Plans, Contributions to Welfare Plans, and Percentage of Total Earnings Bonuses.  If the bonus is excluded because it is discretionary it has to be discretionary as to both the fact of the payment and the amount of the payment.  That means that if you have a bonus plan that has predetermined criteria for earning the bonus or for how big the bonus will be it is not discretionary.  If the bonus isn’t excluded, how you have to compute the regular rate for bonuses that must be included is a bit complicated.  So if you are giving a bonus this year, good for you.  Be sure you do it right.