On June 12, ABC submitted comments to the U.S. Department of Labor’s Wage and Hour Division in support of its proposal to clarify and update the regulations governing regular rate requirements under section 7(e) of the Fair Labor Standards Act and offered the Department further suggestions for improvement. These regulations define what forms of payment employers include and exclude in the “time and one-half” calculation when determining workers’ overtime rates.
In its comment letter, ABC explained that it agrees with the Department’s assessment that it is past time for clarification of how Section 7(e) of the FLSA applies to compensation in the 21st century workplace. Updating the regulations is essential to clarify the types of employee benefits, many of which did not exist when the previous rules were written, that should be excluded from the regular rate. Clarification will encourage more employers to provide benefits such as tuition reimbursement, public transportation subsidies, child care services and numerous similar benefits discussed below.
To assist DOL in this rulemaking, ABC surveyed its member companies to determine what kinds of perks, benefits or other miscellaneous payments are currently being offered to employees in the construction industry. The survey found that large numbers of ABC member employers reward their employees with discretionary bonuses, give payouts to employees of unused vacation and sick leave, offer their employees tuition reimbursement and repayment of student loans and provide other critical employee benefits that DOL is proposing to exclude from the regular rate of pay.
DOL’s WHD issued the Regular Rate Under the Fair Labor Standards Act proposed rule on May 29. According to the proposal, DOL is proposing updates to its regulations governing regular rate for the first time in more than 50 years in order to provide clarity to employers and employees and better reflect the 21st century workplace. For more information, see DOL’s press release and website.