Regular rate FLSA calculations accounting for bonuses: Part 1 of 3.

paycheckExcerpted from: Stephen Bruce PhD, PHR

According to FLSA Overtime, at the rate of at least time and one half, must be paid on all hours worked over 40 in a workweek at the individual’s “regular rate,” not on the nominal hourly rate. FLSA requires that nondiscretionary bonuses must be included in the regular rate of pay. Non-discretionary bonuses include those that are announced to employees to encourage them to work more steadily, rapidly, or efficiently, and bonuses designed to encourage employees to remain with a facility.

The Department of Labor states that few bonuses are discretionary under the FLSA, and therefore few can be excluded from the regular rate.

So, to calculate the amount of the overtime premium, you must first adjust the pay to include the bonuses and then calculate the overtime premium. In practice, it’s often the case that you award bonuses after a paycheck has been issued, and in that situation, you must go back and recalculate the overtime and pay the difference. It’s usually a small amount, but it still must be paid.  Referral bonuses paid for recruitment of new employees are not included in the regular rate of pay if they meet certain conditions (voluntary, not time intensive, after hours among friends and family).

Regular rate FLSA calculations accounting for bonuses: Part 1 of 3.

paycheckExcerpted from: Stephen Bruce PhD, PHR

According to FLSA Overtime, at the rate of at least time and one half, must be paid on all hours worked over 40 in a workweek at the individual’s “regular rate,” not on the nominal hourly rate. FLSA requires that nondiscretionary bonuses must be included in the regular rate of pay. Non-discretionary bonuses include those that are announced to employees to encourage them to work more steadily, rapidly, or efficiently, and bonuses designed to encourage employees to remain with a facility.

The Department of Labor states that few bonuses are discretionary under the FLSA, and therefore few can be excluded from the regular rate.

So, to calculate the amount of the overtime premium, you must first adjust the pay to include the bonuses and then calculate the overtime premium. In practice, it’s often the case that you award bonuses after a paycheck has been issued, and in that situation, you must go back and recalculate the overtime and pay the difference. It’s usually a small amount, but it still must be paid.  Referral bonuses paid for recruitment of new employees are not included in the regular rate of pay if they meet certain conditions (voluntary, not time intensive, after hours among friends and family).

The basics of Phantom Stock issues

incentive-phantom-stock-michae_10762769What is it?: Phantom stock is a form of compensation where a company promises to pay cash at some future date, in an amount equal to the market value of a number of shares of its stock.  The recipent does not receive actual stock.

How does it work?  The payout on Phantom Stock will increase if the stock price rises, and decrease if the stock falls, but without the recipient actually receiving any stock. Like other forms of stock-based compensation plans, phantom stock broadly serves to encourage employee retention, and to align the interests of recipients and shareholders.

Phantom stock is essentially a cash bonus plan, although some plans pay out the benefits in the form of shares. Phantom stock is favored by closely held or family-owned companies who want to provide incentives to management and other employees without granting them equity.

How is it taxed?  When the payout is made, it is taxed as ordinary income to the employee and is deductible to the employer. Generally, phantom plans require the employee to become vested, either through seniority or meeting a performance target.

Sources: 
The National Center of Employee Ownership, http://www.nceo.org/articles/phantom-stock-appreciation-rights-sars)
http://en.wikipedia.org/wiki/Phantom_stock
Pictures and images: http://slgsecurities.files.wordpress.com/2012/09/incentive-phantom-stock-michae_10762769.jpg

 

How long should it take the plaintiff to obtain comparable re-employment?

Title Page -2013 Back Pay and Front Pay CalculationsThat is a central question in many wrongful employment termination lawsuits.  The plaintiff’s back and front pay earnings claims revolve around the answer to this question.  The length of an individual’s job search time depends on a number of factors.  These factors include the individual’s work background, type of job, number of other qualified job searchers, and geographical area.  The individual’s job search methods and efforts are also important factors.

In our work we study these types of job search factors in conjunction with the number of job searchers and employer demand for the relevant job position.

We have studied the labor market conditions for many job positions.  In recent analyses we have studied the labor market for accountants, network computer administrators, and operations managers.  The number of statewide job openings and searchers per job openings is shown in the table below.  Searchers per job openings ratios that are less than 1.0 indicate that there are more job openings than job searchers for the particular job.  Job searcher per job openings ratios greater than 1.0 indicate that there are more job searchers than job openings for the particular job..

jobopeningstable

Methodology

Number of job openings (Labor demand by employers): Based on the distribution of specific job openings in an industry, city and occupational classification.  Data sources include U.S. Bureau of Labor Statistics databases:  JOLT, CPS, and LAUS.

Number of job searchers (Labor supply by individuals): Based on geographical area(s) labor force, percentage of the labor force in each occupation, unemployment rate, and an unemployment rate adjustment factor associated with the occupation.  Data sources include U.S. Bureau of Labor Statistics databases:  JOLT, CPS, and LAUS.

Learn more read the article.

 

 

Dr. Sandra Black’s work on lifetime earnings and school starting age.

Dr. Sandra Black, UT-Austin economics professor, looks at the impact of school starting age and family background on work earnings.   From her work:

We find that if you enter the labor market later, as a result you have less experience and so you get paid less than the people who are the same age who started earlier, but by age 30 you’ve caught up. – Dr. Sandra Black

Expectation damages in business cases from an economic view point

Expectation damages are damages intended to cover what the injured party expected to receive from the a contract and usually have straightforward calculations based on the contract itself or market value.

‘Reference Guide on Estimation of Economic Losses in Damages Awards’, by Robert Hall and Victoria Lazear is a frequently cited source for more discussion on business damages.  The Reference Guide is part of the courts larger manual: : Reference Manual on Scientific Evidence.

Economist Robert Hall

Economic impact of F1 race week in Austin, Texas

F1 – Austin

F1 weekend in Austin is fast approaching.  To date, the definitive study for the economic impact of F1 on the Austin economy as been performed by Dr. Hoyte of TexasEconomicImpact.com

In total, Dr. Hoyte estimates that out‐of‐state fan spending is expected to reach $201 on the Formula One event. .. he estimates
that this level of direct event spending will generate $11.6 million in tax revenues from the gain
to the state under the applicable taxes allowed to be deposited into the Major Event Trust Fund
in support of this event.

Spotlight on Oil and Gas industry

In 2011 (the latest available year), the U.S. BEA reports that the total value of goods and services produced in the Oil and Gas industry was $30.68 Billion and approximately 170,000 people worked in the industry.  The value of the goods and services produced in the Oil and Gas industry more than doubled, even after accounting for inflation since 1998.