Was Your Bonus Included in Overtime Pay?
Was your bonus included in overtime pay when you worked more than 40 hours in a workweek? For many hourly and other non-exempt workers, certain bonuses must be included in the regular rate used to calculate overtime. If a bonus that should have been included is omitted from the regular-rate calculation, a worker’s overtime pay may be too low.
When a Bonus May Affect Overtime
Under the Fair Labor Standards Act, covered, non-exempt employees generally must receive overtime pay for hours over 40 in a workweek based on their regular rate of pay. The regular rate includes most compensation for employment, subject to specific exclusions. Nondiscretionary bonuses generally must be included in the regular rate.
A bonus may be nondiscretionary when it is promised or announced in advance and tied to stated criteria, such as production, attendance, quality, sales, or continued employment. A bonus is not excluded merely because an employer calls it discretionary. Whether it must be included depends on the actual terms and circumstances.
When an included bonus covers more than one workweek, the payment generally must be allocated back over the period in which it was earned. The employer may then owe additional overtime for workweeks in which the employee worked more than 40 hours.
Recent Retention Bonus Case
A recent federal court filing illustrates the issue. In Soliz-Arriaga v. Kiewit Offshore Services, Ltd., the plaintiff alleges that quarterly retention bonuses were not included in the regular rate, resulting in underpaid overtime. On September 15, 2026, the plaintiff filed an unopposed motion asking a Texas federal court to certify a settlement collective and approve the parties’ agreement.
The motion states that the proposed settlement collective includes approximately 2,528 hourly, non-exempt employees who received retention bonuses and worked at least one overtime week from January 8, 2023, through July 6, 2026. Kiewit disputes the claims, including whether the bonuses were discretionary, and does not concede that overtime was underpaid. The settlement remains subject to court approval, and the settlement amount was filed under seal.
Review Your Pay Records
Workers who received a retention, attendance, production, performance, or similar bonus should compare the bonus terms with their pay records. Useful documents include bonus plans, offer letters, pay stubs, time records, employee handbooks, and messages explaining how the bonus was earned.
Contact Kehoe Law Firm
If you worked overtime and believe a bonus was excluded from your overtime calculation, Kehoe Law Firm, P.C. is available to evaluate your pay practices and potential claims. For a free, no-obligation legal evaluation, contact Kehoe Law Firm to discuss your circumstances.
Michael Yarnoff, Esq.
(215) 792-6676, Ext. 804
[email protected]
[email protected]
About Kehoe Law Firm, P.C.
Kehoe Law Firm, P.C. is a nationally recognized, plaintiff-side class action law firm representing investors, consumers, and employees in matters involving securities fraud, corporate misconduct, mergers and acquisitions, antitrust violations, whistleblower claims, data breaches, consumer fraud, employment law violations, and retirement-plan mismanagement. Its attorneys have served as lead or co-lead counsel in major securities cases, recovering more than $10 billion for institutional and individual investors.
Kehoe Law Firm’s class action legal services are provided on a contingency-fee basis, meaning plaintiffs are not responsible for attorneys’ fees or litigation expenses. Any request for attorneys’ fees and expenses will be subject to court approval.
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