U.S. Department of Labor Announces Proposal to Expand Access To Bonuses for America’s Workers

WASHINGTON DC – The U.S. Department of Labor's Wage and Hour Division (WHD) today announced a Notice of Proposed Rulemaking (NPRM) that would allow job creators to offer bonuses or other incentive-based pay to employees whose hours vary from week to week.

The proposal would revise the regulation for computing overtime compensation for salaried, non-exempt employees who work hours that vary each week (i.e., a fluctuating workweek) under the Fair Labor Standards Act (FLSA). It also clarifies that bonus and premium payments on top of fixed salaries are compatible with the fluctuating workweek method of compensation, and that supplemental payments must be included when calculating the regular rate of pay as appropriate under the FLSA. The proposal includes examples and minor revisions to make the rule easier to understand.

"This proposal offers more options for bonus pay and exemplifies the U.S. Department of Labor's commitment to reduce unnecessary burdens in order to benefit America's workers," said U.S. Secretary of Labor Eugene Scalia. "At a time when there are more job openings than job seekers, this proposal would allow America's workers to reap even more benefits from the competitive labor market."

"For far too long, job creators have faced uncertainty regarding their ability to provide bonus pay for workers with fluctuating workweeks," Wage and Hour Division Administrator Cheryl Stanton said. "This proposed rule will provide much-needed clarity for job creators who are looking for new ways to better compensate their workers."

This NPRM is available for public comment for 30 days. The Department encourages interested parties to submit comments on the proposed rule.

WHD's mission is to promote and achieve compliance with labor standards to protect and enhance the welfare of America's workforce. WHD enforces federal minimum-wage, overtime-pay, recordkeeping, and child-labor requirements of the FLSA. WHD also enforces the Migrant and Seasonal Agricultural Worker Protection Act, the Employee Polygraph Protection Act, the Family and Medical Leave Act, wage-garnishment provisions of the Consumer Credit Protection Act, and a number of employment standards and worker protections as provided in several immigration-related statutes. Additionally, WHD administers and enforces the prevailing-wage requirements of the Davis Bacon Act and the Service Contract Act and other statutes applicable to federal contracts for construction and for the provision of goods and services.

The mission of the Department of Labor is to foster, promote, and develop the welfare of the wage earners, job seekers, and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights.