Lump-Sum Payments (Labor) Law and Legal Definition

Lump sum payments are payments made to employees in connection with a general wage rate increase. The payment may be a fixed rate of amount as laid out in a labor agreement or an amount determined by a formula. It may be fixed as a particular rate of an employee’s earnings during the prior year. Lump-sum payments are not incorporated into an employee’s base pay rate or salary, but are considered as non production bonuses in employer costs for employee Compensation series.