Holiday Pay and Bonuses: What’s Legally Required for Small Businesses

bonusIt’s that time of year when the world falls in love … with spending money and shopping! While you may be relying on this time of year to make your business profits soar, your employees may be relying on extra holiday pay and maybe even year-end bonuses.

Some small business owners, especially new small business owners, might be wondering whether they are legally required to provide holiday pay and/or bonuses. Unless your small business is part of a state or local government, then the answer, like most legal business questions, is the standard lawyer mantra of: it depends.

What’s Legally Required?

When it comes to bonuses and holiday pay, there are no specific federal or state laws that require you to provide either to hourly or exempt employees. The one caveat is for non-exempt employees and office closures. If the office closes for even one day for a holiday, the employee will still be entitled to their full week of pay if they worked one day in that week.

Regarding holiday pay, while it may be customary for employers to pay time-and-a-half on holidays, there is no requirement for overtime rates to be paid on holiday hours worked. Unless the employee actually works overtime, however, in which case the normal federal and state overtime laws apply. When it comes to bonuses, there is absolutely nothing in state or federal law requiring bonuses be paid to employees.

 If You Promised, You Need to Follow Through

While the law may not require it, if you promised, or plan to promise, your employees extra wages during the holiday season, or bonuses, you need to follow through as you may have created a contractual obligation. However, you can feel free to craft a bonus and/or holiday pay policy that is mutually beneficial, i.e. making the bonus contingent on meeting individual or company wide performance goals. Additionally, you can exclude categories of employees, such as part-time, probationary, or seasonal employees from the policy.

Time-Off for Holidays

Although the whole world or country may be celebrating the holiday, you can require your employees to be at work. The exception to this is for religious holidays where your employee has asked for the day off to celebrate. Generally, employers should make every effort to provide a reasonable accommodation by providing the time off, as not doing so can run afoul of federal and state anti-discrimination laws. While you are not required to provide the time off if it cannot be reasonably accommodated, that may be a difficult position to defend unless you have clear policies governing time off for employees.

Modified from Original Article written by George Khoury, Esq.

Interesting Lawsuit of the Month: ‘Not Real Fruit in My Donut’ Might Be Strangest Krispy Kreme Lawsuit Ever

doughnutsThere are the things you go to Krispy Kreme for: frosting, fat, comfort, calories, and icing. Fresh fruit, on the other hand, is normally not among the donut chain’s top selling points. Still, there are selections like Glazed Raspberry Filled, the Glazed Blueberry Cake, and the Maple Iced Glazed sitting right there on the menu, so perhaps you could excuse Jason Saidian for thinking those raspberries, blueberries, and, uh, maples would be real, and not just flavoring and food coloring.

When Saidian found out he’d been duped, he did what any other disgruntled donut customer would do. He filed a $5 million lawsuit against the company.

Most of us don’t consider donuts as health food, but maybe we’re selling them short. After all, Saidian’s lawsuit claims raspberries “are a rich source of Vitamin C, Vitamin K, Potassium, and dietary fiber” and “help fight against cancer, heart disease, and age-related decline,” that blueberries “have the potential to limit the development and severity of certain cancers and vascular diseases” and may be “one of the richest sources of antioxidant phytonutrients,” and that maple syrup “contains an abundant amount of naturally occurring minerals such as calcium, manganese, potassium and magnesium” and is also a source of beneficial antioxidants that “have shown to help prevent cancer, support the immune system, lower blood pressure and slow the effects of aging.”

The lawsuit claims that Krispy Kreme misled consumers about the quality of their ingredients, therefore charging more than they otherwise could’ve, and deprived consumers of the health benefits of real fruits they could’ve found in Krispy Kreme’s donuts or bought elsewhere.

So be warned, health-conscious consumers: get your donut fix at Krispy Kreme, and find your fresh fruits in Crunch Berries, Fruit Roll Ups, and Naked Juice.

Quote of the Month

Strive not to be a success, but rather to be of value.

–Albert Einstein