Incentivizing employees can be an important factor when it comes to an employer’s bottom line. Several common misconceptions about the Fair Labor Standards Act (FLSA) have driven decisions regarding incentive payments for too long.
Over the last few months, the U.S. Department of Labor’s (DOL) Wage and Hour Division has clarified how the FLSA applies to incentive payments made to overtime-eligible employees. While a wake-up call for some employers, these are not really changes in the law per se.
Rather, the change is that by announcing these clarifications, the agency has provided employers with more knowledge and empowered them to explore compensation structures that include incentives.