The U. S. Department of Labor’s (DOL) Wage and Hour Division (WHD) today announced a Notice of Proposed Rulemaking (NPRM) updating the regulations governing regular rate requirements for the first time in more than 50 years. Regular rate requirements define what forms of payment employers include and exclude in the "time and one-half" calculation when determining workers' overtime rates. The proposed rule focuses primarily on clarifying whether certain kinds of perks, benefits, or other miscellaneous items must be included in the regular rate. Because these regulations have not been updated in decades, the proposal’s intent is to better define the regular rate for today's workplace practices.
Specifically, the NPRM includes clarifications to confirm that employers may exclude the following from an employee's regular rate of pay:
- The cost of providing wellness programs, onsite specialist treatment, gym access and fitness classes, and employee discounts on retail goods and services;
- Payments for unused paid leave, including paid sick leave;
- Reimbursed expenses, even if not incurred "solely" for the employer's benefit;
- Reimbursed travel expenses that do not exceed the maximum travel reimbursement under the Federal Travel Regulation System and that satisfy other regulatory requirements;
- Discretionary bonuses, by providing additional examples and clarifying that the label given a bonus does not determine whether it is discretionary;
- Benefit plans, including accident, unemployment, and legal services; and
- Tuition programs, such as reimbursement programs or repayment of educational debt.
The proposed rule also includes additional clarification about other forms of compensation, including payment for meal periods, "call back" pay, and others. AGC will provide input to the DOL on the impact this update might have on the construction industry and will notify members of any developments.
For more information, contact Claiborne Guy at claiborne.guy@agc.org or 703-837-5382.