Proposed Department of Labor Rule to Update Regular Rate Requirements
Proposed Department of Labor Rule to Update Regular Rate Requirements

Proposed Department of Labor Rule to Update Regular Rate Requirements

In late March, the Department of Labor (DOL) announced a proposed rule to clarify and update the regulations governing the regular rate requirements under the Fair Labor Standards Act (FLSA). Unless exempt, an employee’s regular rate of pay is used to determine how much he or she should be paid for working overtime. The FLSA generally requires overtime pay of at least 1.5 times the regular rate for hours worked past 40 hours per week.

The proposed rule details what forms of payment employers can exclude when determining an employee’s regular rate of pay. The cost of the following items would no longer apply:

  • Tuition programs
  • Discretionary bonuses
  • Payment for unused paid leave
  • Wellness programs, fitness classes, gym access, onsite specialist treatment
  • Employee discounts on retail goods and services
  • Benefit plans, including unemployment, accident and legal services
  • Reimbursed expenses, even if not incurred “solely” for the employer’s advantage
  • Reimbursed travel expenses that don’t exceed the maximum travel reimbursement permitted under the federal system

The proposed rule also included additional clarification about other forms of compensation including payment for meal periods and “call back” pay.

Under the current rules (which haven’t been updated in 50+ years), employers are discouraged from offering more perks to their employees as it may be unclear as to whether or not those perks must be included in the calculation of an employee’s regular rate of pay. This proposed rule is designed to better reflect a 21st-century workplace and encourage employers to start providing certain benefits without fear of litigation and apprehension about potential overtime consequences.

In turn, the DOL is optimistic this proposed rule would have a positive impact on workplace morale, employee compensation and retention. They invite your feedback and encourage the public to submit comments at www.regulations.gov in the rulemaking docket RIN 1235-AA24. Comments must be submitted by 11:59 p.m. on May 28, 2019 in order to be considered.

Organizations should take time to review their current regular rate of pay practices and ensure they’re prepared for the potential impact of these changes. The outcome could impact how you determine overtime pay for some employees.


hcm-software

More to Discover

DOL Final Overtime Rules: Quickstart Guide for Employers

DOL Final Overtime Rules: Quickstart Guide for Employers

On September 24, 2019, the Department of Labor issued its final overtime rule to increase the minimum salary threshold for executive, administrative and professional exemptions from $455 per week ($23,660 annually) to $684 per week ($35,568 annually). The new rule goes into effect January 1, 2020.As your organization considers how to prepare and comply, we’ve created this guide which outlines the new ruling, provides tips to manage impacted employees and offers a checklist of key details to follow to mitigate risk. Click below to instantly download the guide.

What are W-3 Forms? FAQs and Helpful Tips for 2020

What are W-3 Forms? FAQs and Helpful Tips for 2020

As a trusted HR & payroll provider, Paycor gets hundreds of questions about Form W-3 each year. To help HR professionals mitigate risk, our compliance experts answered the most frequently asked questions around Form W-3. What is a W-3 form? Technical answer: Form W-3 is used to total up all parts of Form W-2. Both forms are filed together and sent to Social Security Administration (SSA) every year. Form W-3 is also known as “Transmittal of Wage and Tax Statements.”What employers really need to know: As an employer your responsibility is to review all W-2s for your workforce, summarize employee wages and tax information and then combine that data into one W-3 form. What’s the difference between Form W-2 and Form W-3? The difference...

Employer Breastfeeding Laws by State

Employer Breastfeeding Laws by State

Breastfeeding, ACA and FLSA When President Obama made the Affordable Care Act (ACA) the law of the land in 2010, new amendments to the Fair Labor Standards Act (FLSA) addressing breastfeeding in the workplace went into effect. The new guidelines require all employers in every state to provide reasonable break time for an employee to express breast milk for their nursing child for one year after the child’s birth. States are Making Changes While the federal government laid the foundation, 32 states have built upon the basic law. Some states have clarified whether these breaks are paid or unpaid and some have extended how long breastfeeding mothers are protected by the law.Where does your state stand? Use the chart below to find out....

Case Study: Smuttynose Brewing Company

Case Study: Smuttynose Brewing Company

Compliance concerns and a desire to streamline their overall HR process led Smuttynose Brewing Company in Hampton, N.H., to find HR & payroll software that suited their needs. With employees scattered throughout the Northeast, Smuttynose needed an efficient way to collect hours worked and to ensure payroll tax compliance. “Paycor is a one stop shop with great customer service and that service does not stop after implementation. I consider Paycor to be a true partner. I am extremely satisfied that I made the switch to Paycor and believe that satisfaction will only grow stronger as our partnership has a chance to mature.” —Mia Jennings, Director of HR, Smuttynose Brewing Paycor’s HR, recruiting and onboarding solutions streamlined a...