New Regular Rate Rule Takes Effect Early in 2020

The U.S. Department of Labor on Dec. 12, 2019, published updates to the rule for calculating the hourly rate of pay for employees who are eligible to earn overtime. The changes become enforceable on Jan. 15, 2020

You will find the complete rule, a fact sheet and other information on this webpage. Principally, the revisions clarify how employers should account for the following costs while calculating a nonexempt employee’s regular rate of pay:

  • Contributions to benefit plans for events that could cause financial hardships, such as accidents, unemployment and legal services;
  • Discretionary bonuses;
  • Certain parking benefits, wellness programs, onsite specialist treatment, gym access and fitness classes, employee discounts on retail goods and services, certain tuition benefits and adoption assistance;
  • Payments for unused paid sick leave and paid time off;
  • Reimbursements for cellphone plans, credentialing exam fees, organization membership dues, and travel taken at least in part for the employer’s benefit;
  • Certain sign-on and longevity bonuses; and
  • Gifts to employees of office coffee and snacks.

IPMA-HR joined several other nonprofit public sector organizations in requesting that DOL revise portions of the draft rule relating to the treatment of holidays-in-lieu and sick leave.

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