The Department of Labor (DOL) made an announcement today, March 28, 2019 that it has begun the formal review process necessary to make changes to various regulations pertaining to the regular rate of pay under the Fair Labor Standards Act (FLSA). The notice and comment period for these changes will run from today until May 28, 2019. At that time the DOL will evaluate the comments and issue new updated regulations shortly thereafter. While details are still a bit sparse, based upon this initial announcement, it is likely that these changes will effect the way many firefighters are paid.
Congress not only enacted the FLSA in 1938, it also created the Wage and Hour Division of the DOL. The Wage and Hour Division of the DOL is tasked with administering and enforcing the provisions of the FLSA on a daily basis. The DOL accomplishes this task through the issuance of regulations, opinions letters, and at times even filing federal lawsuits against employers believed to have violated the FLSA. Regulations issued by the DOL often provide guidance that most courts follow when deciding FLSA cases.
The FLSA requires virtually all of the money an employer pays an employee, with only a few narrow exceptions, included in the regular rate of pay. However, the DOL is responsible for crafting regulations designed to clarify that basic notion. With these new proposed regulations, the DOL seems to be focusing on expanding the few exceptions to that general rule, all remuneration must be included in an employee’s regular rate of pay.
Here is more from the DOL’s news release:
The U.S. Department of Labor today announced a proposed rule to clarify and update the regulations governing regular rate requirements for the first time in more than 50 years.
Regular rate requirements define what forms of payment employers include and exclude in the “time and one-half” calculation when determining workers’ overtime rates.
Under current rules, employers are discouraged from offering more perks to their employees as those perks may be vaguely defined in calculating an employees’ regular rate of pay. The proposed rule focuses primarily on clarifying whether certain kinds of perks, benefits, or other miscellaneous items must be included in the regular rate. Because these regulations have not been updated in decades, the proposal would better define the regular rate for today’s workplace practices.
The Department proposes clarifications to confirm that employers may exclude the following 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 under the Federal Travel Regulation System and that satisfy other regulatory requirements;
- discretionary bonuses, by providing additional examples and clarifying that the label given a bonus does not determine whether it is discretionary;
- benefit plans, including accident, unemployment, and legal services; and
- tuition programs, such as reimbursement programs or repayment of educational debt.
The proposed rule also includes additional clarification about other forms of compensation, including payment for meal periods, “call back” pay, and others.
If you are an employer that provides any of the above listed perks, benefits, or other miscellaneous items to your employees, or if you are a firefighter that receives any of these items, you need to pay close attention to these developments over the next several months. Stay tuned for updates.
Here is a copy of the Proposed Rule Making and Request for Comments.