Jeffrey H. Ruzal, Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s New York office, was cited in SHRM, in “Small Bonuses May Count Toward Determining Who is Exempt,” by Allen Smith.

Following is an excerpt:

Small, nondiscretionary bonuses may become more popular if the proposed overtime rule is finalized. The bonuses could be counted toward the recommended salary-level threshold of $35,308 per year for determining whether someone is exempt from the overtime requirements.

Using bonuses to bump a worker over the overtime salary threshold would be a new practice. Under the Department of Labor’s (DOL’s) proposed rule, nondiscretionary bonuses and commissions paid on an annual or more frequent basis would satisfy up to 10 percent of the standard exempt salary level for the white-collar exemptions. So instead of guaranteeing a salary of $679 per week to reach the threshold, an employer could pay $611.10 per week and distribute bonuses, incentive pay or commissions equal to at least $3,530.80—10 percent of $35,308—at the end of the year to reach the salary-level threshold. The 2016 overtime rule, which was blocked by a federal district court, would have let employers include only nondiscretionary bonuses paid at least quarterly. …

A company with ebbs and flows in its earnings may not have the steady income year-round to raise an employee’s salary to the salary-level threshold, noted Jeffrey Ruzal, an attorney with Epstein Becker Green in New York City. Such an organization might be likelier to use bonuses to reach the salary-level threshold.

Jump to Page

Privacy Preference Center

When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalized web experience. Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer.

Strictly Necessary Cookies

These cookies are necessary for the website to function and cannot be switched off in our systems. They are usually only set in response to actions made by you which amount to a request for services, such as setting your privacy preferences, logging in or filling in forms. You can set your browser to block or alert you about these cookies, but some parts of the site will not then work. These cookies do not store any personally identifiable information.

Performance Cookies

These cookies allow us to count visits and traffic sources so we can measure and improve the performance of our site. They help us to know which pages are the most and least popular and see how visitors move around the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies we will not know when you have visited our site, and will not be able to monitor its performance.