Under federal law, would discretionary bonuses count towards exemption status?
Question Details: In order for an employee to be considered exempt from overtime at a retail establishment they need to derive over half of their income from commission. However, do "bonuses" count as "commission" in calculating the acceptable use of meeting that threshold? More specifically, would a discretionary bonus be used in calculating whether or not an employee meets that threshold? And, even more specifically, would a discretionary bonus that is mislabeled and actually appears to be a non-discretionary bonus be used in calculating whether or not employees meet that threshold? For example, the employee's base salary is $42,000 a year. Total gross annual income is $85,000 but $30,000 of that is labeled a "bonus" and only $13,000 is labeled as "commission".
No, a discretionary bonus would not count towards the threshold. I non-discretionary bonus would IF it in fact was based on the same criteria as a commission--that is, sales--and so is actually a commission by another name; the law looks to the underlying reality, not the label applied. A bonus needs to functionally be a commission for this purpose.