Home health company owed $25K after DOL investigation
Getting employees in the door with sign-on bonuses can help a company through a hiring crunch, but a new employee’s bonus may need to be included in the regular rate of pay for overtime purposes.
In fact, the Department of Labor (DOL) has been checking for compliance with this aspet of the Fair Labor Standards Act (FLSA).
Recent example: A home health services company in Pittsburgh had to pay $12,469 in back wages and $12,469 in liquidated damages.
What happened? The company, Three Rivers Home Care LLC, had offered sign-on bonuses to 26 home health aides.
There was a contingency, though. The new employees had to continue working until the time of payment. According to the DOL, that made the bonuses nondiscretionary.
Don’t rely on labels
Make sure everyone’s clear on the terms of any sign-on bonuses your company may offer.
Will new hires be paid on their first payday after joining the company? Do they have to work a certain number of months before receiving the money? If they leave the company, will they need to repay their bonuses?
Even if your company has labeled a bonus “discretionary,” overtime may nonetheless be due if the bonus is tied to hours worked or services provided.