On March 28, 2019, DOL announced a proposed rule to clarify and update the regulations governing the "regular rate" on which overtime is computed. Under current rules, employers are discouraged from offering more perks to their employees as it may be unclear whether those perks must be included in the calculation of an employees' regular rate of pay. The proposed rule focuses primarily on clarifying whether certain kinds of perks, benefits, or other miscellaneous items must be included in the regular rate.
The DOL proposed clarifications to confirm that employers may exclude the following from an employee's regular rate of pay:
The DOL has not proposed any changes to the definition of an excludable discretionary bonus but the agency has proposed some new examples of discretionary bonuses that are excludable. These include bonuses paid to employees who make unique or extraordinary efforts that are not awarded according to pre-established criteria, severance bonuses, bonuses for overcoming challenging or stressful situations, and employee-of-the-month bonuses. The proposed rule also includes additional clarification about other forms of compensation, including payment for meal periods, "call back" pay, and others.
Comments on the "regular rate" regulations are due May 28, 2019.
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