Paul DeCamp, Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s Washington, DC, office, was quoted in Law360 Employment Authority in “DOL Clarifies OT Obligations for Quarterly Bonuses,” by Irene Spezzamonte. (Read the full version – subscription required.)
Following is an excerpt:
In one of the letters, released Thursday, the agency said the quarterly bonuses are based on employees' total earnings and already factor in overtime premiums and, as a result, the employer did not need to recalculate workers' regular pay rate to calculate overtime under the Fair Labor Standards Act.
Paul DeCamp, a former administrator in the DOL's Wage and Hour Division under former President George W. Bush, called the bonuses payment "somewhat unusual" but said some employers might find it compelling.
"Perhaps the relative ease of carrying out these calculations, combined with the ability to know in advance how much money the employer will have to pay in bonuses and related payments, may make this type of approach to bonuses an attractive option for businesses in coming years," said DeCamp, who is a member of management-side firm Epstein Becker Green. …
DeCamp said that the DOL's conclusion that the nonexempt hours don't undermine the employee's salary basis, "while probably correct, is perhaps more likely to encounter some opposition." …
Epstein Becker's DeCamp said the letter addresses an issue that often arises in litigation and although it "does not purport to resolve the issue for all fact scenarios, the letter is persuasive and important guidance for the particular scenario the agency addressed."
In the last letter, the DOL was unable to provide a definitive answer on whether a hospital's timekeeping and compensation practices met the FLSA's requirements.
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