Chapter 7 established that a bonus's discretionary or nondiscretionary label decides whether it counts toward the regular rate. Section 7(e)(3)(a) of the Act supplies the actual test, and it has teeth: an employer keeps a bonus out of the regular rate only by holding onto real discretion — not a formula dressed up as one — over both whether to pay the bonus at all and how much to pay, and by holding onto that discretion until a time quite close to the end of the period the bonus covers. Give up either piece of that discretion in advance, and the bonus becomes part of the wages the employee counted on, whatever it is called.

That discretion is easy to lose without meaning to. An employer who tells employees in January that a bonus is coming in June has already abandoned discretion over the fact of payment, even though no amount was ever named. An employer who promises a fixed per-item rate — a cent for every unit sold, paid whenever the firm's finances allow it — has abandoned discretion over the amount instead, even though the fact of payment stayed open. Losing either one is enough to pull the bonus into the regular rate; a bonus announced to induce steadier or faster work, or that is conditioned on staying employed until payday, is treated the same way, because it too leads employees to expect the payment.

A true gift or Christmas bonus runs on a separate track. Section 7(e)(1) excludes sums paid as gifts, or as a reward for service, whose amount is not measured by or dependent on hours worked, production, or efficiency — and unlike a discretionary bonus, a gift can be paid with enough regularity that employees come to expect it, and can vary by salary or length of service, without losing its exclusion. What disqualifies a payment as a gift is being tied to output: a bonus geared to hours, production, or efficiency is wages by another name, no matter what occasion it is attached to.