U.S. Rep. Ken Calvert (R-CA) introduced legislation designed to protect employee bonuses from certain federal requirements.
Under the Fair Labor Standards Act of 1938 (FLSA), the Department of Labor requires that any employer calculate and factor in earned bonuses when determining an employee’s “regular rate of pay.” Calvert contends that the requirement poses an unnecessary burden on businesses and employers, who are required to recalculate each employee’s rate of pay depending on different bonuses earned every month. Calvert said that many businesses are forced to eliminate these incentives because they cannot afford to hire an accountant or designate an employee to determine these changing rates of pay.
Thus, his bill, the Employee Bonus Protection Act (H.R. 741), would amend the FLSA to provide that an employee’s regular pay rate, for purposes of calculating overtime compensation, will not be affected by additional payments to reward an employee or group of employees for meeting or exceeding goals.
“The last thing that should prevent a hard-working employee from getting a bonus is government red tape,” Calvert said. “The Employee Bonus Protection Act will help American workers and small businesses by getting the government out of the way and providing a simpler way for employers to award bonuses.”