Every Friday, we make it our business to find a terrific compensation/reward oriented blog post from the past week from somewhere outside the Cafe, and highlight it here. This week we point you to Mike Haberman's HR Observations blog, and his recent post Getting Punished for Trying to Do Good.
Mike does us all a service by reminding us about a particular set of fine print in the FLSA (Fair Labor Standards Act); one requiring that any non-discretionary bonuses awarded to nonexempt employees must be allocated over the time period to which they apply and then included in overtime calculation. He does this by sharing the story of what happened when one well-meaning employer inadvertently ran afoul of this requirement.
From Mike's post:
QuikTrip, a Tulsa, Oklahoma based convenience store chain, has agreed to pay out $750,000 in overtime payments that the U.S. DOL said were due employees because of a violation of the Fair Labor Standards Act. By just looking at the headline you might think this is the "standard" case of a company working employees off the clock or not counting time they worked. Well if you thought that you would be very wrong. This case has to do with a company trying to do good things for their employees and rewarding them for their good work.
QuikTrip has a bonus system based upon a secret shopper program. Employees are rewarded for extra good work based upon their ratings in the program. What an excellent thing to do! However, QuikTrip got caught in a making a mistake that many companies probably don't even realize they could make too. In fact when I talk about this in the SHRM prep classes I teach most people are agast. The mistake that QuikTrip made was in giving nonexempt employees non-discretionary bonuses! Because if you give nonexempt employees non-discretionary bonuses you have to use that in your overtime calculation for the period of time that was covered by the bonus.
Click through to learn more about this FLSA requirement ... and then be sure to check out Mike's follow-up posting on the topic as well.
HR Observations is a great source of HR related news, trends and developments - explained by a seasoned and savvy HR professional. If you aren't already subscribed to Mike's blog, I recommend you do so today.
Have a great weekend!
Thank you for your coverage of this and the very kind words.
Posted by: Michael Haberman, SPHR | 07/31/2009 at 01:43 PM