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2634723 - FLSA for California Flat Sum Bonus

Symptom

On March 5, 2018, the California Supreme Court issued a ruling clarifying how employers must handle flat-sum bonuses (i.e., additional compensation that does not change depending on the number of hours worked by an employee) in the calculation of overtime.

Under this ruling, an employer must:

  • Calculate a non-exempt employee’s additional overtime by dividing the amount of the flat-sum bonus by the actual number of non-overtime hours worked by the employee;
  • Then multiplying that per-hour value by 1.5 (or 2, depending on the applicable multiplier to use) and by the number of overtime hours worked.

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Environment


  • Human Capital Management (HCM)
  • SAP R/3
  • SAP ERP
  • SAP enhancement package for SAP ERP
  • SAP ERP with Software Component SAP_HRCUS

Product

SAP ERP all versions ; SAP enhancement package for SAP ERP all versions

Keywords

FLS,  California, Flat Sum, bonus, overtime, Payroll US, Payroll driver, PC00_M10_CALC, PC00_M10_CALC_SIMU, RPCALCU0, RGRTE, payroll function, processing class 85 , KBA , PY-US , USA , PY-US-TX , Taxes , How To

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