From a client: How can I give my employees bonuses?

My employees are all hourly (non-exempt) and I would like to give them the opportunity to earn bonuses for referring business to us. But then I heard that bonuses have to be calculated into overtime pay and I don’t want to pay more in overtime or to do some calculation each time I want to give them a bonus. What are my options?

My HR survival tip

This company is right about the connection between bonuses and overtime pay. However, a different solution came to me that would be much simpler. This company doesn’t yet offer any form of paid time off. We decided to create a referral program that awarded employees with a certain number of paid bonus hours for each referral. Each bonus hour is equivalent to an hour’s pay but can’t be turned in for cash. They can use these hours as paid time off (like vacation pay) and, eventually, any earned and unused amount would be paid out upon termination.

Compare my solution to adjusting the overtime pay rate. Most people might just add the bonus amount to a paycheck. For example, if an employee worked  [click to read more …]