Convoluted federal requirements would no longer impact employee bonuses under legislation sponsored on Feb. 2 by U.S. Rep. Ken Calvert (R-CA).
“The last thing that should prevent a hard-working employee from getting a bonus is government red tape,” Rep. Calvert said.
Specifically, the Employee Bonus Protection Act, H.R. 741, would amend the Fair Labor Standards Act of 1938 (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 productivity, quality, efficiency, or sales goals under a gain sharing, incentive bonus, commission, or performance contingent bonus plan, according to information provided by Rep. Calvert’s office.
“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,” said the congressman.
Under the FLSA, the U.S. Labor Department requires that any employer calculate and factor in earned bonuses when determining an employee’s “regular rate of pay” for purposes of overtime compensation for each pay period, the information says.
Rep. Calvert thinks this requirement poses an unnecessary burden on businesses and employers, who then have to recalculate each employee’s rate of pay depending on different bonuses earned every month.
The congressman in January 2021 originally introduced the same-named H.R. 517, which stalled in the U.S. House Education and Labor Committee.