April 1, 2019

New U.S. Labor Department Proposal Would Update How Employers Calculate Overtime

As Connecting the Dots already has reported, earlier this year the U.S. Department of Labor (DOL) proposed an overtime rule that would increase the minimum salary for overtime exemption to $35,308 per year, or, from the currently weekly level of $455 to $679 per week. Then, last week, the department issued another proposed overtime rule. As Employee Benefits News explains, this proposal would define and update “what forms of payment employers include and exclude in the time-and-one-half calculation when determining workers’ overtime rates.”

Specifically, the rule would allow employers to exclude the following forms of compensation 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 permitted under the Federal Travel Regulation System regulations and that satisfy other regulatory requirements;
  • Discretionary bonuses;
  • Benefit plans, including accident, unemployment, and legal services; and
  • Tuition programs, such as reimbursement programs or repayment of educational debt.

More information about the proposed rule is available at the DOL’s website. Members of the public can submit comments on the proposal via www.regulations.gov through May 28, 2019 by searching for rulemaking docket RIN 1235-AA24.