Jeff Ruzal Cited in “Small Bonuses May Count Toward Determining Who is Exempt”


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.