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Benefits & Overtime Calculations

The Department of Labor (DOL) announced its Final Rule, effective 1/15/20, clarifying that the following perks/benefits may be offered without including them in the calculation of employees’ regular rate of pay for overtime:

  • The cost of providing certain parking benefits, wellness programs, onsite specialist treatment, gym access and fitness classes, employee discounts on retail goods and services, certain tuition benefits (whether paid to an employee, an education provider, or a student loan program), and adoption assistance;
  • Payments for unused paid leave, including paid sick leave or paid time off;
  • Payments of certain penalties required under state and local scheduling laws;
  • Reimbursed expenses, including cell phone plans, credentialing exam fees, organization membership dues, and travel, even if not incurred “solely” for the employer’s benefit, and the rule clarifies that reimbursements that don’t exceed the maximum travel reimbursement under the Federal Travel Regulation System or the optional IRS substantiation amounts for travel expenses are per se “reasonable payments”;
  • Certain sign-on bonuses and longevity bonuses;
  • The cost of office coffee and snacks to employees as gifts;
  • Discretionary bonuses, by clarifying that the label given a bonus does not determine whether it is discretionary; and
  • Contributions to benefit plans for accident, unemployment, legal services, or other events that could cause future financial hardship or expense.

As was noted above, these new regulations go into effect on January 15th. Employers should consider reevaluating their overtime practices to ensure their continued compliance with the new regulations. A DOL fact sheet can be found here.

Fri Dec 20, 7:17pm

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