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Handyman Quick Quiz Answer: Bonus Based Upon Company’s Annual Performance

Dec. 18th 2010

The answer to our November 4 Quick Quiz is “Yes”:  Fair Labor Standards Act overtime must indeed be figured on the kind of bonus we described.  In fact, the U.S. Wage and Hour Division’s Office of Enforcement Policy (“OEP”) took this position with respect to such a bonus in a May 2006 opinion letter.

Under the FLSA, overtime for non-exempt employees must be calculated based upon the “regular rate” of pay.  The FLSA says that the regular rate includes “all remuneration for employment paid to, or on behalf of, the employee,” with only limited exceptions.

Bonuses are not excluded from this definition simply because they are earned over an entire calendar year.  See, e.g., Opinion Letter of Deputy Wage-Hour Administrator FLSA2005-47 (November 4, 2005)(“regular rate” included a retention payment designed to encourage employees to remain employed at a facility from June 6, 2002 through September 21, 2004).

Employers need not compute overtime on “discretionary” bonuses within the FLSA’s meaning.  However, this exception applies only if both (a) whether the payments will be made, and (b) the amounts of any such payments:

•   Are within management’s sole discretion;

•   Are decided at or near the end of the period for which the performance of services is being recognized; and

•   Are not made pursuant to any prior contract, agreement, or promise (either expressed or implied) causing the employee to expect such payments regularly.

29 U.S.C.A. 207(e)(3)(a).  OEP concluded that the kind of annual bonus we described did not fall within these parameters, in part because the benchmarks for whether a bonus would be due suggested that the payments were promised “as an incentive for increased or sustained productive efforts.”  OEP also determined that the employer abandoned any discretion as to both whether payments would be made and what the amounts would be by announcing the criteria to employees well in advance, which in OEP’s view appeared to be “a prior promise or agreement” to pay the bonus if those criteria were met.  And although OEP did not clearly say so in explaining its conclusion, the bonus’s requirements relating to longevity and remaining employed at the time of payment also cut against its being viewed as discretionary.

Because the bonus is not excludable from the regular rate, Acme must determine whether any non-exempt employee receiving a bonus payment worked more than 40 hours in any workweek in the bonus period.  For any employee who did so, it must then figure the workweek-equivalent of the bonus and must calculate overtime on that equivalent for every workweek in which the employee worked overtime.

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Handyman Insurance

Insurance might not be the first thing someone thinks about when running a business, but it should be an important consideration.   Handyman insurance is another requirement if you are thinking about starting a handyman business.  This website provides important insurance information on Handyman Insurance Coverage and quotes.

Handyman Insurance Coverage

Handyman insurance includes several types of coverage; each one offers a specific kind of protection for your business.  

(Handyman Insurance ) Commercial Auto: Covers a business's owned, no owned, and hired autos against liability and physical damage losses. 

Handyman Workers Compensation:  If your business as a Handyman employs any staff (including part-time, trainees or sub-contractors), Employers liability insurance cover is a legal requirement.  Employers liability insurance provides protection against your legal liabilities to pay compensation in respect of injury sustained by your employees in the course of your business as a Handyman.  (Handyman Insurance) Workers Compensation: Provides coverage for an employer's responsibility in the event of a work-related injury or illness.   Employers Liability Insurance for handyman work: This type of insurance would cover payment of legal fees and damages in the event that an employee was injured or killed while doing work for you. 

Tradesman Insurance for handymen: This is a package of several different kinds of cover for handymen, making up one policy that meets all your insurance needs.

Public Liability Insurance for handyman work: This type of insurance would cover you if your business activities caused injury or death to a member of the public.

Handyman General Liability - Commercial jobs will require you to have general liability coverage of $1,000,000 to $2,000,000 prior to being hired (not to mention that you protect your assets if something goes wrong on the job).

Products liability insurance for Handymen - Products liability insurance provides protection against your legal liability, compensation costs and expenses following injury or damage by goods that you have sold, supplied, repaired, tested or delivered in connection with your business as a Handyman.  Products Liability insurance for Handymen at 1,000,000 with the option to increase to 2,000,000 up to 5,000,000 or more.  Public Liability insurance cover provides protection against your legal liability for injury to third parties and damage to their property in connection with your business as a Handyman.

Professional Indemnity Insurance for handyman work: This covers you against any mistakes you might make  including bad advice you or your staff might give  that ends up costing your clients money, and leading them to take legal action against you.

(Handyman Insurance ) Umbrella Coverage: A broader form of coverage that extends the limits of liability found in a base policy form. 

Income Protection Insurance - If the essential person should be unable to work for a period of time, this handyman insurance helps to cover the loss of business as a result of the illness or injury.  Having sufficient income protection insurance is also a worth while consideration, if you were to fall off a step ladder or hurt your back and couldnt work, accident, sickness and unemployment insurance could help you to pay for some of your monthly bills in the event of you not being able to work.

The Handyman Insurance Program gives our policyholder comprehensive coverage for their handyman businesses, and the program is designed for Handymen who: Are hired to do a variety of miscellaneous work that would be found in a residential household environment;

Please note that standard home owner's insurance will most likely not cover business assets, and may VOID your home insurance coverage.  If your business is home-based, do you need more liability coverage than your home insurance policy covers. 

The Handyman program gives our policyholder comprehensive coverage for their handyman businesses, and the program is designed for Handymen.

Handyman Insurance Quotes

Find information on insurance companies and agents, rate quotes and comparisons, insurance buying tips, claims filing information and much more. Find the best Handyman insurance quotes liability commercial and small Handyman companies offering affordable monthly payment options for your handyman business and the self-employed.  Find the best Handyman insurance quotes from some of the finest and solid insurance companies who compare liability coverages based upon your own personal choices.  Get online quotes for handyman insurance now.  And it can help you save money on your handyman insurance without compromising on the level of cover you need.  The Handyman tradesman insurance policy has been crafted to cover all your Handyman insurance needs at the most competitive price.

 

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