The U.S. Department of Labor (DOL) has taken recent steps to help employers comply with the Fair Labor Standards Act (FLSA).
The DOL’s Final Rule, which took effect January 15, 2020, clarified the types of employee benefits that may be excluded from a nonexempt employee’s “regular rate.” The FLSA requires payment of at least 1.5 times a nonexempt employee’s regular rate for hours worked over 40 in a workweek.
With limited exclusions, the “regular rate” includes “all remuneration for employment paid to, or on behalf of, the employee,” including nondiscretionary bonuses and nondiscretionary incentive payments. In contrast, employers may exclude discretionary bonus payments from a nonexempt employee’s regular rate.
