Do the new Department of Labor (DOL) overtime rules change how an employer may use bonuses to satisfy the salary level threshold for a highly compensated employee (HCE)?

Author: Deborah J. Tibbetts, Esq.

No. The new DOL overtime rules do not change how an employer may use nondiscretionary bonuses or incentive payments to meet the salary level component of the HCE test. However, under the new rules, an employer must pay an HCE at least $913 per week on a salary or fee basis. The remainder of an HCE's total annual compensation may include commissions, nondiscretionary bonuses and other nondiscretionary compensation.