DOL Proposes Updating Regular Rate Regulations
On March 28, 2019, the DOL proposed a rule designed to clarify and update the definition of the “regular rate” under Section 7(e) of the Fair Labor Standards Act (FLSA). The current rules have not been updated in decades, and have been the source of some confusion, so employers should welcome this development.
Absent an exemption, employers generally must pay overtime at a rate not less than one and one-half times the employee’s “regular rate” of pay for hours worked in excess of 40 in a workweek. Therefore, accurately calculating an employee’s “regular rate” of pay is essential in order for an employer to correctly pay overtime compensation. However, under the current rules, employers are sometimes unclear as to whether the value of certain perks, benefits, or miscellaneous items should be included when calculating the “regular rate.” The DOL’s proposed rule would provide some long-awaited clarity.