Can a nonexempt employee receive a one-time payment for additional work performed or as a bonus?
There are specific rules regarding the payment of discretionary and non-discretionary bonuses to nonexempt employees. Essentially, a nonexempt employee may receive a lump sum discretionary bonus if the employee had no expectation of receiving the bonus in response to having met certain targeted goals (i.e. the bonus payment was not in connection with an approved bonus plan). Bonuses paid to an employee for having met certain established goals defined in advance of the work being performed are considered non-discretionary. The dollar value of these types of bonuses, as well as requests to compensate nonexempt employees for additional work performed, must be added into an employee’s total compensation for the time period in which the employee performed the work to ensure that any overtime worked by the employee is recorded and compensated at the correct rate.
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