Many workers in California don’t realize that certain bonuses should count toward their hourly wage, affecting both their regular pay and overtime. While you might think of bonuses as separate from your regular earnings, California law requires that some bonuses be included in your regular rate of pay. If you aren’t sure whether you’re missing out on these bonuses, it’s important to understand how they impact your pay under California’s wage laws.
How bonuses should be factored into your pay
California law says some bonuses must count when calculating your regular rate of pay. Non-discretionary bonuses are one example. These bonuses depend on your performance, like meeting goals or quotas set by your employer. If you earn a bonus for reaching these targets, it becomes part of your regular rate of pay, which will also affect how your employer calculates overtime. Signing and attendance bonuses can also count if they are tied to specific work expectations, making them part of your regular pay.
The effect of bonuses on overtime pay
If your employer offers you a non-discretionary bonus, you must include it in your overtime pay rate. California law requires that overtime pay be 1.5 times your regular hourly rate for hours worked over 8 in a day or 40 in a week. If your employer doesn’t factor your bonus into this calculation, you won’t receive the overtime pay you deserve.
What to do if you’re missing out on bonuses
If you think your employer isn’t including your bonuses in your hourly wage or overtime pay, carefully review your pay stubs. Check if your regular rate includes any bonuses you’ve received. If it doesn’t, speak with your employer to correct the issue and ensure you get the compensation you’re entitled to under California law.