Q. I employ a physical therapist on a salaried basis, making her an exempt professional under the Fair Labor Standards Act (). Can I pay her an hourly bonus without causing her to lose the exempt status?
A. Yes. FLSA permits an employer to pay an hourly bonus to a salaried employee without jeopardizing the employee’s exempt professional status so long as the employer continues to pay her salary. Let’s say you pay her a salary of $500 per week as your physical therapist. If you are so inclined, you are permitted to give her another $500 cash in addition to her paycheck, but you cannot give her a $1,000 tip in lieu of her normal salaried paycheck.
Bonuses such as you suggest may be a good way to pay who travel on business, too. While hourly employees are entitled to their hourly rate for some travel time, exempt employees are not—they have to work as long as it takes to get the job done, and that includes traveling to and from a business meeting or event. But paying extra for travel may ease the sting. Follow the same rules outlined above to avoid problems with the U.S. Labor Department.
Before you open your wallet, however, you will want to check applicable state laws to make sure you are not violating your state wage-and-hour laws.