By Dan Davis, 3/6/2026
If you’re paid an hourly wage plus bonuses — for safety, attendance, production, or hitting performance targets — there’s a good chance your overtime is being calculated wrong, and in your employer’s favor. A recent ruling from the U.S. Department of Labor is a useful reminder of a rule that trips up a lot of employers: most bonuses have to be baked into your overtime rate.
In January 2026, the Department of Labor issued an opinion letter (FLSA2026-2) looking at how a waste-management company paid its drivers. The drivers earned a $12-per-hour base wage, plus bonuses of up to $9.50 an hour tied to things like safety, punctuality, attendance, completing their daily routes, following traffic laws, and even keeping a professional appearance.
When the company calculated overtime, it used only the $12 base rate and ignored the bonuses. The DOL said that violates the Fair Labor Standards Act (FLSA). Because those bonuses were promised in advance based on set criteria, they had to be counted as part of the workers’ pay when figuring overtime — and leaving them out shortchanged the drivers.
Here’s the piece many workers don’t realize: overtime isn’t just “time-and-a-half on my base hourly wage.” Under the FLSA, non-exempt employees are owed 1.5 times their regular rate for every hour over 40 in a workweek — and your “regular rate” includes almost everything you earn that week, not just your base pay.
To find it, you add up your pay for the week and divide by the hours you worked. Bonuses that count get folded into that total, which raises your regular rate — and therefore raises your overtime.
A quick example using the DOL’s own numbers: say you work 50 hours at $12 an hour, plus $9.50 an hour in bonuses. Your total straight-time pay is $1,075, and your regular rate is $21.50 an hour ($1,075 ÷ 50). Your overtime premium is half of that — $10.75 — for each of your 10 overtime hours, or about $107.50 extra that week. If your employer instead paid overtime on just the $12 base, it would have added only $60 — leaving roughly $47.50 on the table. Every week. Over a year, that’s real money.
The law draws a line between two kinds of bonuses:
Discretionary bonuses can be left out of overtime — but the bar is high. Both whether you get the bonus and how much have to be entirely up to the employer, decided at or near the end of the period, and not promised ahead of time. A true surprise, in other words.
Non-discretionary bonuses must be included — and this is most workplace bonuses. If a bonus is tied to a formula or announced criteria you’re expected to meet — production numbers, attendance, safety records, performance goals — it counts. The 2026 opinion drove this home: even where the employer uses a little judgment applying the rules (for instance, deciding whether a truck was returned “clean”), the bonus is still non-discretionary because the terms were set before the work was done.
Bonuses that usually have to be counted include production or piece-rate bonuses, attendance bonuses, safety bonuses, performance incentives, and most commissions.
A lot of Louisiana jobs are paid exactly this way — a base hourly rate plus incentives. Think trucking and transportation, oilfield and industrial services, construction, manufacturing, and sanitation. If you work in one of these fields, earn bonuses, and regularly work more than 40 hours a week, it’s worth a close look at whether your overtime has been calculated correctly.
If it hasn’t, the FLSA generally lets you recover up to two years of unpaid overtime (three if the violation was willful), often plus an equal amount in additional damages, and your attorney’s fees. Holding onto your pay stubs makes these cases much easier to prove.
At Estes Davis Law, we help Louisiana workers recover overtime they’ve earned but haven’t been paid — including cases where employers leave bonuses out of the math. If you’re paid a base wage plus bonuses and you work overtime, we’ll review your pay for free and tell you honestly whether you may have a claim. Call us at (225) 336-3394 for a free, confidential consultation. Se habla español.
This article is general information about the law and is not legal advice. Every situation is different; for advice about your specific circumstances, please consult an attorney.
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