Yes, if it is a nondiscretionary bonus. A nondiscretionary bonus is included in determining the regular rate of pay for computing overtime when it is based upon hours worked, production or proficiency or as an incentive to remain employed by the same employer. Incentive bonuses include flat sum bonuses. Flat sum bonuses must be computed by dividing the bonus by the maximum legal regular hours worked, not by the total hours worked during the pay period. Bonuses designed as an incentive for increased production for each hour worked are divided by the total hours worked in the pay period. Discretionary bonuses or sums paid as gifts at a holiday or other special occasions, such as a reward for good service, which are not measured by or dependent upon hours worked, production or efficiency, are not included for purposes of determining the regular rate of pay.
October 2018
Tags: California, Overtime