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September 22, 2010
Supplemental Pay in the U.S. Labor Market

In a BLR webinar entitled "Avoid Startling High Fines and Expensive Lawsuits Based on Failure to Pay Overtime on Bonuses," Clint D. Robison, Esq. from the Los Angeles office of Hinshaw and Culbertson LLP described some statistics relating to supplemental pay in the U.S. Labor Market:

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  • 2007 supplemental pay represented 3% of private sector compensation costs
  • That number was up slightly in 2010
  • The trend in supplemental pay is upward
  • Meanwhile, paid leave is on a downward trend
  • Insurance benefits also went down
  • 55% of workers are in jobs with overtime pay
  • 42% of workers are in jobs with bonus pay
  • Workers in production occupations have the highest percentage of supplemental pay
  • Employers in production occupations and in the health care industry should be the most concerned about compliance
  • Overtime varies widely by industry
  • Bonuses vary widely by industry
  • Approximately 80% of bonuses fall within Management Occupations and Business and Financial Operations

Overtime rules for non-exempt employees are as follows:

  • Employees covered by the Fair Labor Standards Act (FLSA) must receive overtime pay for hours worked in excess of 40 in a workweek at a rate not less than time and one-half their regular rates of pay
  • The Act applies on a workweek basis
  • An employee's workweek is a fixed and regularly recurring period of 168 hours -- seven consecutive 24-hour periods
  • It need not coincide with the calendar week, but may begin on any day and at any hour of the day
  • Different workweeks may be established for different employees or groups of employees
  • Averaging of hours over two or more weeks is not permitted
  • Normally, overtime pay earned in a particular workweek must be paid on the regular pay day for the pay period in which the wages were earned

Clint D. Robison, Esq. is a an attorney in the Los Angeles office of Hinshaw and Culbertson LLP (www.hinshawlaw.com) and Chair of its Employment Practice Liability subgroup. He provides counseling, litigation and risk management services to medium- and large-sized public and private entities and handles all aspects of employment litigation and advice including wage and hour matters, discrimination claims, employment contracts, trade secret issues, retaliation claims, sexual harassment claims and Americans with Disabilities Act (ADA) issues.

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