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Compensation  >>   Lump Sum Wage / Salary Increase Search Discussion Posts
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Lump Sum Wage / Salary Increase  
Posted: 02/17/2010 01:44pm   86 Views

I am looking for information on the application of a lump sum payout in lieu of an across-the-board wage adjustment affecting 2500 employees.  We do not utilize total rewards or pay for performance metrics.  I'm looking for advise on how to avoid having this lump sum payout  - which will be a  variable percentage (different job families/groups, e.g. Registered Nurse) tied to hospital financial performance measures - impact non-exempt overtime.  Previously we've used lump sum to compensate overmaximum rates (paid out 2x year based on worked hours).  Has anyone had experience or advise on the best way to approach this?


Lump Sum Wage / Salary Increase  
Posted: 02/17/2010 01:59pm   Revised: 02/17/2010 02:06pm  

This topic has come up here before, Judy, and these two prior strings should help you.


See Claudia Elmore's comments in this string for help with the overtime issue:


 Claudia is commenting in reference to this W@W white paper: 

Overtime Calculations for Non-Exempt Employees Due to Bonus:  http://www.worldatwork.org/waw/adimLink?id=17207&nonav=yes

This DOL reference is also helpful: http://www.dol.gov/elaws/esa/flsa/otcalc/docstatexc.asp

Hope this helps.


Lump Sum Wage / Salary Increase  
Posted: 02/17/2010 02:30pm  

Thanks Frank for referencing the previous links - saves me time on typing!


Lump Sum Wage / Salary Increase  
Posted: 02/17/2010 02:36pm  

Thanks Frank.  I've been reading up on the DOL W/H opinions/guide - appreciate the link.  If I've interpreted correctely, as the calculation of the "bonus"  comes with no expectation set for the employee - and the amount will be at the sole discretion of the employer (I'm thinking we will use a factor  based on a percentage of the hospital financial status then allocate by expected future hours (employee status/fte) (applicable to all exempt/non-exempt classifications) , it appears with this scenario, the bonus would be excluded from the base rate and therefore exempt from the impact of working through ot calculations. 


Lump Sum Wage / Salary Increase  
Posted: 02/17/2010 02:46pm  

Here is what the DOL says about exclusions from the overtime calculations. From what you've described, the bonus can be excluded, as you surmised.

Exclusions: Sums paid in recognition of services performed during a given period if one of the following three conditions is met: 

  1. both the fact that payment is to be made and the amount of the payment are at the sole discretion of the employer at or near the end of the period and not according to any prior contract, agreement, or promise causing an employee to expect such payments regularly; or
  2. the payments are made pursuant to a bona fide profit-sharing plan or trust or bona fide thrift savings plan, which meet additional requirements set forth in the regulations; or
  3. the payments are talent fees (as defined in the regulations) paid to performers, including announcers on radio and television programs. 




Lump Sum Wage / Salary Increase  
Posted: 02/18/2010 07:47am  

Your response is very much appreciated - the links were very helpful.

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