Fair Labor Standards Act (FLSA): Federal law governing minimum wage, overtime pay, recordkeeping, and youth employment standards affecting full-time and part-time workers in the private sector and in government.
Internal Revenue Code (IRC): Federal tax laws that govern how bonuses are taxed, including withholding requirements and tax treatment of supplemental wages.
Employee Retirement Income Security Act (ERISA): Federal law that sets minimum standards for pension and health plans in private industry, particularly relevant if bonuses affect retirement contributions or benefits.
Equal Pay Act: Federal law requiring that men and women in the same workplace be given equal pay for equal work, including bonus compensation.
IRS Supplemental Wage Regulations: Specific IRS rules governing how supplemental wages (including bonuses) should be taxed and reported.
FICA Requirements: Social Security and Medicare tax obligations that must be withheld from bonus payments.
State Wage and Hour Laws: State-specific regulations governing wage payments, including timing and method of bonus payments.
Title VII of the Civil Rights Act: Federal law prohibiting employment discrimination based on race, color, religion, sex, and national origin, which applies to bonus distribution.
Age Discrimination in Employment Act (ADEA): Federal law protecting workers 40 and older from employment discrimination, including in bonus arrangements.
Americans with Disabilities Act (ADA): Federal law prohibiting discrimination against individuals with disabilities, which must be considered in bonus eligibility criteria.
Contract Law Principles: Basic elements of contract law including offer, acceptance, consideration, and clear terms that must be incorporated into the bonus agreement.
Company Compensation Policies: Internal company policies and procedures that govern how bonuses are calculated, earned, and distributed.
