Attendance Bonuses and Overtime Under the FLSA

Many employers have introduced weekly attendance bonuses to encourage employees to return to work. Wage disputes have led to questions about whether or not those bonuses must be included when calculating overtime under the Fair Labor Standards Act.

Do Attendance Bonuses Affect Overtime Pay?

Under the FLSA, nonexempt employees generally receive one-and-one-half times their regular rate for hours worked over 40 in a workweek. The regular rate can include more than base hourly pay.

What Is the FLSA Regular Rate?

It’s the hourly rate used to calculate overtime pay for non-exempt employees, which includes all remuneration for employment except certain exclusions. It’s determined by dividing the total compensation for the workweek by the total hours worked in that week.

When Can a Bonus Change the Overtime Rate?

Compensation generally must be included in the regular-rate calculation unless a specific exclusion applies. Attendance bonuses may therefore affect the regular rate and the resulting overtime rate depending on how the bonus is structured.

For workers receiving attendance or similar bonuses, the key issue is whether the payment is part of the compensation that federal law requires employers to include in the regular rate.

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