Department of Labor Issues Final Rule on What Perks Can be Included in "Regular Rate" of Pay

The U.S. Department of Labor announced its final rule on what perks employers can exclude from the regular rate of pay calculation. This ruling will take effect on January 15, 2020 and is the first significant update in over 50 years to the regulations under the Fair Labor Standards Act (FLSA) that govern the regular rate requirements.

According to the agency's website, employers may exclude the following form an employee's regular rate of pay:

  • 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 cellphone plans, credentialing exam fees, organization membership dues, and travel, even if not incurred "solely" for the employer's benefit; and clarifies that reimbursements that do not 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 certain 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 providing additional examples and;
  • contributions to benefit plans for accident, unemployment, legal services, or other events that could cause future financial hardship or expense.

For more information see the links below.

Please contact a member of Barrett McNagny's Labor and Employment group with any questions. 

Barrett McNagny LLP

Legal Disclaimer

The information contained in the Barrett McNagny LLP website is for informational purposes only and should not be considered legal advice on any subject matter. Furthermore, the information contained on our website may not reflect the most current legal developments. You should not act upon this information without consulting legal counsel.

Your transmission and receipt of information on the Barrett McNagny LLP website, or sending an e-mail to one of our attorneys or staff, will not create an attorney-client relationship between you and Barrett McNagny LLP. If you need legal advice and want to establish an attorney-client relationship with Barrett McNagny LLP, please contact one of our attorneys by telephone, email, or other means of communication, and allow the attorney to confirm that the firm does not represent other persons or entities involved in the matter and that the firm is willing to accept representation. Until such confirmation is provided by one of our attorneys, you should not transmit information to us that you consider confidential. If you do provide information to us, and no attorney-client relationship is established, the information will not be considered confidential or privileged, and our receipt of such information will not preclude us from representing another client in a matter adverse to you.

Any links to other websites are not intended to be referrals or endorsements of those sites.

Privacy Policy

Terms of Use

ADA Compliance

Contact Us
Hello,
My name is
 
and I am a(n)
seeking legal counsel in the area of 
.
Please
me at
as soon as you can.

Thank you for contacting us!

A representative will be in touch with you shortly.

An attorney-client relationship will NOT be formed merely by sending an email to Barrett McNagny, LLP or to any of its attorneys. Please do not send any information specific to your legal needs until you obtain approval from a Barrett McNagny, LLP attorney, as the content of such email will not be considered confidential or privileged. By sending us an email, you confirm your understanding of this notification. If you agree, you may use the e-mail links on this page to contact an attorney.
YesNo