On September 30, the Department of Labor (DOL) released an opinion letter on how to calculate required overtime pay. Generally, the opinion letter notes that an employee’s overtime pay calculation is not restricted to base hourly wages. Rather, it must include all compensation paid to a worker, including in this case emergency pay premiums.
This opinion letter examined the facts and determined that the emergency pay premiums that were the subject of the inquiry did not fit into the statutory exceptions to the requirement that all forms of compensation be included when calculating overtime pay. Some discretionary bonuses will be excepted from this rule (subject to specific conditions), the opinion letter noted.
Prospects: This opinion letter can serve as an important reminder of the importance of accurate calculation of overtime pay rates.
NAIFA Staff Contact: Jayne Fitzgerald – Director – Government Relations, at jfitzgerald@naifa.org.