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Hazard Pay Must Be Included in Regular Rate for Overtime Purposes, DOL Says

November 24, 2020

Via: HR Hero

Employers must include COVID-19 incentive payments, such as hazard pay, in an employee’s regular rate for calculating overtime payments, the U.S. Department of Labor (DOL) stated in recent guidance.

What New Guidance Says

Employers may compensate nonexempt employees in a variety of ways. To calculate the amount of overtime pay, you must first determine the employee’s regular rate of pay. Generally, you find it by dividing total compensation for employment, less any statutory exclusions, by the total number of hours worked. The Fair Labor Standards Act (FLSA) provides an exhaustive list of payments you may exclude from the regular rate when calculating overtime payments.

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