2634723 - FLSA for California Flat Sum Bonus

On March 5, 2018, the California Supreme Court issued a ruling clarifying how employers must handle flat-sum bonuses (i.e., additional compensation that does not change depending on the number of hours worked by an employee) in the calculation of overtime.

Under this ruling, an employer must:

• Calculate a non-exempt employee’s additional overtime by dividing the amount of the flat-sum bonus by the actual number of non-overtime hours worked by the employee;
• Then multiplying that per-hour value by 1.5 (or 2, depending on the applicable multiplier to use) and by the number of overtime hours worked.

Image/data in this KBA is from SAP internal systems, sample data, or demo systems. Any resemblance to real data is purely coincidental.

FLS, California, Flat Sum, bonus, overtime, Payroll US, Payroll driver, PC00_M10_CALC, PC00_M10_CALC_SIMU, RPCALCU0, RGRTE, payroll function, processing class 85 , KBA , PY-US , USA , PY-US-TX , Taxes , How To