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Department of Labor Issues New Fact Sheet Regarding Treatment of Bonuses

Nov 8, 2016 - Blog by

DOL Issues New Fact Sheet Regarding Treatment of Bonuses for Exempt White Collar Employees

November 8, 2016 – Eric W. Barth

employee-payroll-bonusesRecently, the U.S. Department of Labor (DOL) issued a Fact Sheet regarding the Treatment of Bonuses for Exempt White Collar Employees under the DOL regulations that take effect on December 1, 2016. Under those regulations, employers may use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10% of the standard salary level for the following exemptions: Executive, Administrative, Professional, and salaried Computer Workers.  To be able to credit nondiscretionary bonuses and incentive payments toward a portion of the standard salary level, employers must make such payments on a quarterly or more frequent basis.  The new rule allows employers to make a “catch-up” payment at the end of each quarter.

The DOL’s Fact Sheet provides examples of how employers can apply the new rules to nondiscretionary compensation and can be downloaded here.  For more information about the new regulations or to discuss compliance strategies, contact attorneys Eric W. Barth, James C. Spencer, Mitchell L. Herren, David M. Rapp, or Christopher L. Arellano at 316.267.2000.

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