New DOL guidelines for regular rate: What Payroll must know Update to procedures for what to exclude Right on the heels of the new overtime threshold comes news that the Dept. of Labor (DOL) is updating the regs in the Fair Labor Standards Act that control the regular rage of pay — for the first time in over 50 years. Many of the changes are designed to clarify which types of incentives and perks can be excluded from the regular rate when calculating overtime pay. Examples of exclusions In the past, the DOL’s indicated it wanted to update the guidelines for the regular rate to more closely reflect how employees are compensated in the modern workplace Pay practices have changed drastically in the last few years alone, and the regs have been falling further and further behind. That’s caused confusion about whether certain types of modern compensation or perks are part of the regular rate. The proposed rule lists specific examples of items that can now officially be excluded from employees’ regular rate of pay, including: Payments for unused paid time off or leave (including sick leave) The cost of providing wellness programs to workers (such as on-site specialist treatment, gym access fitness classes, and employee discounts on products and services) Discretionary bonuses Reimbursed expense (including those that weren’t solely for the benefit of the employer) Tuition programs (e.g., reimbursement programs or student-debt repayment programs) Reimbursed travel expenses that don’t exceed the maximum travel reimbursement allowed under the law, and Benefit programs (e.g., accident, unemployment and legal services). Other updates Besides this clarification on the regular rate, the DOL’s proposed rule will also contain updates about compensation for meal periods, “call back” pay and other situations. More info: dol.gov/whd/overtime/regularrate2019.htm