Question: The employer established a performance-based bonus plan under which workers who were not exempt from the minimum wage and overtime provisions of the FLSA were evaluated on various productivity criteria. At year's end, some of the company's top performers were given lump-sum, one-time bonuses. Who received the bonuses and in what amounts were determinations made by the CEO in her sole discretion.
The company was under no advance contractual obligation to give any bonuses or to give any particular employees a bonus. Should the employer be permitted to exclude these lump-sum bonuses when calculating a recipient's hourly rate of pay for purposes of determining whether she or he has been receiving the proper amount when entitled to overtime compensation? See Department of Labor, Wage and Hour Division, Opinion Letter of May 19, 2000 [2000 WL 1537273].