Texas Bonus and Incentive Dispute Attorney

Employers may utilize a wide variety of incentives to accomplish specific goals. “Incentives” and “bonuses” are sometimes interchangeable terms, as an employer might “incentivize” a team with a promised non-discretionary bonus if they meet set productivity goals. Incentives can take other forms, as well, such as paid time off or fringe benefits. 

Under federal law, employers are not necessarily owed any incentives by default unless they are detailed in their employment agreement or some other enforceable contract. The FLSA does not require employers to provide employees with paid time off, discretionary bonuses, or non-discretionary bonuses. Some state laws do require employers to provide paid sick leave, but none mandate bonuses or monetary incentives of any kind.

Incentives will generally be offered voluntarily when employers are looking to recruit attractive job applicants or incentivize existing employees to stay. For example, an employer might advertise generous paid vacation time to compel qualified candidates to apply and consider a position. This incentive should be included in the prospective worker’s employment agreement. If an employer is looking to retain employees, they might offer an amended employment agreement that promises new incentives, such as non-discretionary bonuses or other perks. 

Some incentives are also inherent to certain types of jobs, such as sales positions. Many salespeople will receive incentives or commissions tied to the number of products or services they individually sell. Again, the structure of the incentives will be detailed in an employment agreement. It should be noted that any employee must make at least the federal minimum wage outside of any incentives or commission. Incentives and commissions are not “tips,” and employees receiving the bulk of their income through incentives and/or commissions are not regulated the same way as tipped employees.

Incentives can also take the form of “severance packages” and be offered to exiting employees. A severance package is used to compel someone to sign a severance agreement, which generally limits a departing employee’s ability to sue their former employer.

The bottom line is that employers are not legally offered to require most types of incentives unless the applicable state laws specify otherwise. Many employers do voluntarily offer various forms of incentives, and your employer cannot withdraw or deny any earned incentive that is detailed in your employment agreement or any other enforceable contract. If your employer is refusing to honor a contractual or legally required incentive, our labor law lawyer can help. We can review all relevant legal agreements and advise whether you have a claim.

When Am I Entitled to Per Diems?

Many employees will be required to travel for work. Some employers will provide employees with a company credit card that they can use to pay for necessary services. When a company credit card is not available, an employee acting on behalf of a business will need to pay out-of-pocket and be reimbursed by their employer. These reimbursements are called “per diems.”

The federal government has set standard rates for several categories of per diems. An employee traveling on business has the legal right to request reimbursement up to these rates without providing individual receipts. Some states and municipalities have set their own per diem rates, and federal law mandates that employers honor the highest applicable rate. 

As of January 2020, the federal per diem rates are as follows:

• $96 per day for lodging
• $55 per day for meals
• $5 per day for incidentals

Federal per diem rates are set lower on the first and last days of travel to compensate for the likelihood that an employee will not be traveling the entire day. On these days, employees are generally entitled to 75% of the applicable per diem rate.

Note that employers and employees are not necessarily limited to the federal government’s or a local municipality’s per diem rates. An employer can negotiate a higher per diem rate with their employee in advance of the business trip. In these instances, an employee is entitled to the higher negotiated per diem amount promised by the employer if they meet conditions established in advance by the employer (such as providing individual receipts for expenses).

If you travel for business and incur out-of-pocket expenses, your boss must reimburse you at the applicable per diem rate. You do not have to prove that you used all available funds, and you are entitled to the full rate. Per diem reimbursements are not taxed and should not involve deductions of any kind. Ideally, your employer will pay you per diem reimbursements in advance. They also have the right to provide you with reimbursements soon after your trip has concluded. 

Am I a Per Diem Employee?

Employers have the right to hire and utilize “per diem employees.” These types of employees are “on-call” and are summoned to do a day of work at a flat rate negotiated with their employer. Nurses and substitute teachers are common types of per diem employees. 

While employers generally do not need to offer benefits or incentives to per diem employees, they do have to follow applicable minimum wage and overtime laws. Though a day rate is typically contractually agreed upon in advance of potential work, pay must be adjusted if a per diem employee works so many hours in a day that their rate falls below the minimum wage. Per diem employees must also track hours and are entitled to overtime compensation if they work a sufficient number of hours.

Employers will sometimes misclassify part-time employees as per diem employees. If you are considered a per diem employee but are regularly working week-to-week, you may have been misclassified and should get in touch with our firm.

Our bonus and incentive dispute lawyer can help you navigate per diem misclassification issues. Our legal team at Fair Labor Law can also assist with claims involving unpaid per diem reimbursements. We are familiar with many types of compensation structures and provide you with the seasoned guidance and representation you need to recover what you are owed.

Contact us online or call (888) 333-7147 to discuss your case with us. We serve clients nationwide and provide our services in English and Spanish.