Final DOL Ruling on Calculating Employee Overtime Pay
Last week, the United States Department of Labor issued its final rule allowing businesses to leave several “perks” out of the formula they use to calculate employee overtime pay, including tuition benefits, paid leave cash-outs and some bonuses. The rule is meant to clear up uncertainty regarding what benefits and perks will be included in overtime calculations.
The rule also excludes payments for unused paid leave, cellphone and travel reimbursement, the costs of parking benefits, wellness plans and gym access, and longevity bonuses and discretionary bonuses. The DOL estimates that millions of dollars spent in litigating regular rate disputes will be saved by issuance of the new rule. It is also expected that employers will be more willing to give employees additional perks if they know they won’t be subjected to lawsuits for unpaid overtime. The rule becomes effective on January 15, 2020.
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