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Safety and Performance Bonuses in Overtime: DOL Opinion Letter FLSA2026-2

A January 2026 Labor Department opinion letter reviewed a bonus program for waste-management drivers. Because employees knew the criteria and automatically earned payments after meeting them, the bonuses were nondiscretionary.

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Safety and Performance Bonuses in Overtime: DOL Opinion Letter FLSA2026-2

Quick answer: Bonuses tied to announced safety, attendance, job-duty, and performance criteria generally enter the regular rate when employees know the formula in advance.

The plan reviewed

FLSA2026-2 considered additional hourly bonus amounts awarded for satisfying published safety, attendance, job-duty, and performance standards. The combined value could reach several dollars per hour.

Why the payments were nondiscretionary

Employees knew the standards before performing the work, and payment followed automatically when the standards were met. The employer did not retain meaningful discretion at the end of the period.

Calculation example

A driver earns $22 per hour, works 45 hours, and receives a $225 weekly bonus.

Common plan errors

Genuine discretionary bonuses

A bonus may be excluded only when the fact and amount of payment remain at the employer’s sole discretion near the end of the period and the payment was not promised or expected.

Frequently Asked Questions

Do safety bonuses affect overtime?

Usually when announced and earned under stated criteria.

Are attendance bonuses included?

Promised attendance bonuses generally are.

Does the pay-stub label control?

No.

How is overtime adjusted?

The regular rate is recalculated with the bonus.

What if the bonus covers a quarter?

It generally must be allocated to the earning weeks.

Official Sources

This article is for general educational purposes and is not legal, tax, accounting, payroll, or employment advice. Rules can change and may differ by state, locality, occupation, employer, and employee circumstances.

Reviewed for accuracy by the OvertimePayUSA editorial team using official labor sources such as the U.S. Department of Labor and state agencies.
Official Sources

This calculator is for educational purposes only. Consult your employer or a labor attorney for advice specific to your situation.

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Frequently Asked Questions

Can my employer require me to work overtime?
Yes. Employers can require overtime work. However, they must pay the required overtime premium (1.5x or higher per state law) for hours over the threshold. Refusing to work overtime may result in termination, but employers cannot refuse to pay overtime premiums that are legally owed.
What should I do if I think I'm owed unpaid overtime?
Document everything: save pay stubs, time records, emails, and any communications about hours worked. Calculate what you believe is owed. Contact your employer in writing first. If they don't respond satisfactorily, file a complaint with your state Department of Labor or the U.S. Department of Labor Wage and Hour Division. Consider consulting an employment attorney for large amounts.
Is my salaried position automatically exempt from overtime?
No. Many salaried positions still qualify for overtime pay. Exemption requires: (1) earning above the minimum threshold (~$35,500 federally, varies by state), and (2) spending more than 50% of time in exempt duties (executive, professional, administrative). If unsure, file a wage claim or consult an employment attorney.
Can I get overtime pay if I work multiple jobs?
Federal overtime laws (FLSA) typically count only hours for a single employer. However, some states have more generous rules. Hours worked for different employers at the same time usually don't combine for overtime purposes unless you're an independent contractor. Check your state's Department of Labor for specific rules.
What's the statute of limitations for claiming unpaid overtime?
Federally, you have 2-3 years to file a lawsuit for unpaid wages (3 years for willful violations). State laws vary: California allows 3-4 years, New York allows 6 years. For administrative complaints, the timeframe is often shorter (1-2 years). Act quickly if you believe you're owed wages.
Do I have to be paid for meal breaks?
If you work during a meal break or cannot take a true break away from your workstation, that time must be paid. If you take an actual, uninterrupted break (usually 20+ minutes), it can be unpaid. Rules vary by state—check your state's Department of Labor for specifics.
Do safety bonuses affect overtime?
Usually when announced and earned under stated criteria.
Are attendance bonuses included?
Promised attendance bonuses generally are.
How is overtime adjusted?
The regular rate is recalculated with the bonus.
What if the bonus covers a quarter?
It generally must be allocated to the earning weeks.
⚖️ Statutory Legal Authority: Overtime pay calculations strictly follow the Fair Labor Standards Act (FLSA), 29 U.S.C. § 207 and U.S. Department of Labor (WHD) Regulations 29 C.F.R. Part 778. State daily overtime rules comply with California Labor Code § 510, Colorado COMPS Order #38, and Alaska Stat. § 23.10.060.