One of the few “wins” for employers under the DOL’s new overtime rule was that employers are now allowed to apply “nondiscretionary incentive payments” to meet up to 10 percent of the new salary threshold. This change could prove very important for employers who pay employees on a commission basis or who use other incentive-based compensation.
But what qualifies as a nondiscretionary incentive payment? What options do employers have in changing their compensation plans to ensure compliance with the new rule? And what could be the unintended consequences of those changes? This post looks at this new rule and attempts to answer some of those questions.