Is the value of gift cards (given as a holiday gift) part of my employees’ compensation that needs to be considered when calculating overtime?

While a gift card may not look anything like a paycheck, an employer should still consider whether it will legally be considered part of an employee’s compensation.

Under both state and federal law, most payments to employees are considered compensation that must be included in an employee’s “regular rate of pay,” which is the rate used to calculate overtime.

The regular rate of pay may be higher than the employee’s normal hourly rate because the regular rate includes other forms of compensation an employee may receive, such as bonuses, commissions, piece rates and the value of most employer-provided meals and lodging.