If an employee earns an incentive in the form of a prize or cash award, the value of the award is not included when calculating the employee's overtime pay.

Question

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Under the Fair Labor Standards Act, if the performance-based pay is in the form of a prize or cash award, the employer generally must include the value of that award when calculating the worker's overtime pay for that pay period.

If an Employee Earns an Incentive in the Form of a Prize