Over the past week, we have taken a detailed look at the DOL’s new regulations affecting the calculation of the “regular rate” of pay.
In Part 1, we addressed bona fide meal periods and pay for showing up or coming back. In Part 2, we looked at paid time off, reimbursements for business expenses, and “reasonableness” of expenses. Finally, in Part 3, we examined shift differentials and premium payments, discretionary bonuses, so-called “other similar payments,” and bona fide benefit plan contributions.
One reader wrote to ask if I could put together a summary, so here’s the TL;DR version:
- Pay for bona fide meal periods that would not otherwise qualify as hours worked can be excluded from an employee’s regular rate of pay.
- “Call back” pay and other similar payments, including those made pursuant to state or local law, no longer have to be “infrequent and sporadic” to be excludable from an employee’s regular rate as long as such payments are not prearranged.
- Pay for unused paid leave (including paid sick leave), and not just vacation and holidays, are now clearly excluded from an employee’s regular rate of pay.
- Reimbursed expenses need not be incurred “solely” for an employer’s benefit for the reimbursements to be excludable from the regular rate.
- Reimbursements at or beneath the maximum reimbursable amount under the Federal Travel Regulation or IRS limits are per se reasonable and excludable from the regular rate.
- Shift differentials and premium payments made for various purposes are more clearly excludable from the regular rate.
- Discretionary bonuses are excluded from the regular rate if (a) both the fact and amounts of the bonuses are determined at the employer’s sole discretion near the end of the bonus periods.
- An expanded, non-exhaustive list of employer-provided perks or benefits—like wellness programs, onsite medical treatments, or parking—may be excluded from an employee’s regular rate of pay.
- A more modern list of benefit plans are now excludable from the regular rate, including plans compliant with certain IRS regulations and unemployment, legal services and accident plans.
For more details, please see the full 3-part series linked above!