How are bonuses calculated when employees are paid by the hour?

In California, bonuses for hourly-paid employees are calculated using the employee’s regular rate of pay. This means that an employee’s hourly wage, which is the amount paid for each hour worked, is multiplied by the number of hours worked to arrive at a total amount for each pay period. Any bonuses or tips that the employee earns during the pay period are then added to the employee’s regular rate of pay. The employee’s regular rate of pay is the total of the employee’s base wages, bonuses and tips, which is divided by the total number of hours worked in the pay period. This number is then used as the hourly rate when calculating the employee’s bonus pay. The bonus pay is the amount that employees receive in addition to their regular wages. Bonuses can be provided for performance, hours worked, years of service, or for any other reason that an employer may choose. Bonus payments are not limited to any specific amount, but must adhere to the applicable minimum wage law and employer policies and practices.

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How are bonuses calculated when employees are paid by the hour?

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