Overview: 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
Updated to reflect information on a Connecticut Supreme Court ruling limiting the use of the fluctuating workweek method of calculating overtime.
The fluctuating workweek method of calculating overtime also may not be used for delivery drivers or for sales merchandisers, the Connecticut Supreme Court ruled in Williams v. General Nutrition Ctrs., Inc.
Updated to reflect forthcoming requirements under the Oregon scheduling law.
Updated to reflect forthcoming local overtime requirements under the New York City Fair Work Practices ordinances.
Updated to reflect new quasi-overtime requirements under the Seattle Secure Scheduling Ordinance, effective July 1, 2017.
In Flores v. City of San Gabriel, the 9th Circuit Court of Appeals held that payments of cash in lieu of benefits must be included in the regular rate when calculating how much overtime employees are owed under the Fair Labor Standards Act (FLSA).
In-depth review of the spectrum of Maryland employment law requirements HR must follow with respect to overtime.
In-depth review of the spectrum of West Virginia employment law requirements HR must follow with respect to overtime.
In-depth review of the spectrum of Michigan employment law requirements HR must follow in respect to overtime.
HR guidance on complying with the FLSA requirements on an employee’s regular rate of pay.