DOL redefines what counts in 'regular rate'.

When calculating overtime, you must pay nonexempt employees at a rate of 1.5 times their regular rate of pay for work beyond 40 hours a week.

This is not 1.5 times their hourly rate. The regular rate includes hourly wages, plus certain bonuses, commissions, shift-differentials and more. It doesn't include other things, like paid leave or employer contributions to retirement accounts.

For many years, however, employers have been uncertain about what exactly counts as part of the regular rate of pay. And that lack of clarity has sometimes discouraged employers from offering more perks to their employees.

To help inject more clarity to the situation, the U.S. Department of Labor last month proposed changing the definition of "regular rate" for the first time in 50 years. The proposal confirms that these items can be excluded from any regular rate calculation:

* The cost of providing wellness programs, onsite specialist treatment, gym access and fitness classes, and employee discounts on retail goods and services.

* Payments for unused paid leave, including paid sick leave.

* Discretionary bonuses.

* Benefit plans, including accident, unemployment and legal services.

* Tuition programs, such as reimbursement programs or repayment of educational debt.

* Reimbursed...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT