Back to News

U.S. Department of Labor Proposes Changes to Regular Rate of Pay

Published on

April 2, 2019

After more than 50 years, the U.S. Department of Labor is proposing to update and clarify how employers need to calculate an employee’s regular rate of pay. The regular rate is important because nonexempt employees receive overtime pay at least one and one-half times their regular rate. The department noted that compensation practices have evolved significantly over the last half-century, and clarifying what can and can’t be used as regular rate of pay allows employers to offer innovative employee perks and benefits without fear of costly litigation.

The department proposes that the following will not be included in the calculation of the regular rate:

  • Cost of providing onsite treatment such as chiropractors and message therapists
  • Gym access, gym memberships and fitness classes on or offsite
  • Wellness programs such as health risk assessments, nutrition classes, weight loss programs, etc.
  • Employee discounts on retail goods or services
  • Tuition programs
  • Show up pay and call-back pay
  • Discretionary bonuses
  • Benefit plans, including accident, unemployment and legal services
  • Payments for unused paid leave and bona fide meal periods
  • Reimbursed expenses incurred by the employee on behalf of the employer
  • Reimbursed travel expenses that do not exceed the maximum amount permitted under the Federal Travel Regulation System and satisfy other regulatory requirments

There is now a 60-day comment period on the proposed regulations, which will close on May 28. The department will then consider the comments submitted before issuing any final regulations. Comments on the regulations can be submitted at www.regulations.gov in the rulemaking docket RIN 1235-AA24.

If you have any questions on these proposed regulations, please reach out to me or anyone in the firm’s Employment Practice Group


Related News

View More News
News Alert
June 7, 2023

U.S. Department of Labor Division Offers An Opinion Letter on the Interplay Between FMLA and Week Day Holidays

The Wage and Hour Division within the U.S. Department of Labor published an...

Learn More
News Alert
June 1, 2023

National Labor Relations Board Eyes Non-Compete Agreements

The National Labor Relations Board (NLRB) made recent headlines yet again. ...

Learn More
Press Release
May 26, 2023

Barley Snyder Partner Jennifer Craighead Carey Honored in Millersville University’s Marvelous Marauder Program

For Immediate Release Lancaster, Pa. – Barley Snyder is pleased to announ...

Learn More

Get in Touch

Our attorneys, paralegals and staff look forward to hearing from you. Please reach out to let us know how we can help.

Get In Touch
RECOGNIZED IN
Super Lawyers
Best Law Firms US News
Best Lawyers