Regular Rate of Pay

Editor's Note: It's not always just straight hourly wages.

Michael CardmanOverview: The Fair Labor Standards Act (FLSA)'s overtime laws require employers to pay employees one and one-half times their regular rate of pay for all hours beyond 40 in a workweek.

But just what exactly is the regular rate of pay? If an employee is paid an hourly wage and nothing else, then the regular rate of pay is simply the hourly wage.

But other forms of payment also must be included in the regular rate of pay, including the cost of meals and lodging, commissions and certain bonuses. Understanding what must be included, and what may be excluded, from the regular rate is crucial to ensuring employees are paid as much overtime as they are due.

Trends: As the economy rebounds, employers that begin paying out more bonuses and other forms of compensation will need to pay careful attention to the regular rate of pay.

Author: Michael Cardman, Legal Editor

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