If we give non-cash rewards, does the value affect overtime?

Most types of bonus payments made to employees must be included in the “regular rate” and will affect overtime. This holds true where the employer provides a non-cash reward (such as a jacket, gift card, or similar item) if the bonus is a reward for something like attendance, production, quality, or efficiency.

The Wage and Hour Division’s Field Operations Handbook offers the following in Chapter 32, Overtime:

Section 32b06 Payments other than cash. Where employees are paid goods or facilities which are regarded as part of their wages, the reasonable cost to the employer of the goods or the facilities must be included in the regular rate.

Note that in some cases, employees may receive rewards from another organization for their efforts. These payments can also affect overtime. The Field Operations Handbook offers the following:

32b07 PM’s (push money) and other wage payments made by suppliers. Certain retail establishment sales employees (for example, those who sell cosmetics and related items) may receive, in addition to the wages paid by their employer, payments from manufacturers or distributors for selling certain items or brands. Such payments may be made directly to the sales employees to to the employer for distribution to the employees. All such payments to employees for their work are “wages” and must be recorded by the employer and included in the regular rate of pay of the employees involved.