b'award is not given for an employment purpose; or (2) the prizeSanta Claus is coming to town: Nick has been working on the or award has no value.Prizes given for activity outside of workline at Tawnys Toy Factory for more years than he can count.and working hours that are beyond the employees usual dutyFor as long as he can remember, Tawny gives the employees and different from what the employee regularly does will meetaChristmasBonusthatisnottiedtoproductivitybuthas the exemption requirement. Otherwise, the value of the prizetruly come to be expected. Is the bonus subject to overtime? must be included in the employees overtime.It may be discriminatory, but it is not subject to overtime. Even Common Situations: though the bonus has been given so long that it is no longer truly discretionary under the law, the Department of Labor (DOL) has Back in the saddle: Mary takes six weeks unpaid time away fromspecifically excluded Christmas Bonuses and bonuses paid Toms Tortilla Factory to care for her elderly mother. Marys timesolely for longevity with a company from overtime calculations, away is covered by the Family Medical Leave Act (FMLA). (Seeas long as the bonus is not so large as to be considered part the FMLA section for more information.) Mary arrives just in timeof the employees regular compensation. That said, a bonus of for payment of the quarterly plant safety bonus to employeesthis type tied in any way to productivity would be included in but does not receive her bonus check. Upon inquiry, she is toldovertime, so employers should be careful.by Tom that she does not qualify because she was out for a substantial portion of the quarter. Has Tom violated the law? What Should I Do: Yes. Because the safety bonus is not tied to Marys productivityGood: Evaluate any bonus program you have, and be sure to and relates to the overall safety of the plant, Mary is entitledpay overtime on bonus amounts for non-discretionary bonuses.to receive her check. Safety, attendance, and other bonuses related to the activity of all employees fall into this category. Better:Followtheadviceabove,plusputnon-discretionary That said, Tom may pro-rate the check for the portion of thebonusprogramsinwritingtobesureeveryoneisclearon quarter for which Mary was present. what the rules are, and be certain to include a provision that employees must be employed at the time the bonus is awarded Ill take that, please: Sadies Circuit Boards pays handsometo receive it. bonuses to sales representatives who meet certain sales goals.Joel makes a huge sale to uPod Mobile Music, Inc. and receivesBest:Inadditiontotheabove,haveallemployeessign a large bonus based on that sale. Months later, uPod backs outacknowledgements regarding all bonus programs. Be careful of the agreement, and Sadie appears at Joels desk with hertoavoiddiscretionarybonusesbecomingnon-discretionary hand out demanding repayment of the bonus Joel received onby varying the award from year to year and the timing of such the sale. Can Sadie take this approach? It depends. If Sadie hasaward.included a clawback provision in the bonus structure for sales representatives, it is possible she can recoup the money from Joel. Without such an agreement in writing, her demand will not stand up. Clawback agreements are becoming more common in businesses and raise a large number of issuesespecially for executives and officers. IRS Section 409A governing parachute programs and Sarbanes-Oxley can come into play if repayment is permitted over time. Check with your employment counsel before implementing a clawback provision.32'